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Taxation Process

Muhammad Zain Ul Haq

13PWMCT0305

Wajahat Ali Khan

13PWMCT0315
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TAX
• A compulsory contribution to state revenue, levied by the
government on workers income and business profits, or added to
the cost of some goods, services, and transactions

• The sources of tax revenue in Pakistan are:

1. Federal Taxes
2. Provincial Taxes
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Federal Taxes
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Direct Taxes
• Income Tax:
It is kind of direct tax that is lived on a person having
income more than the certain level.
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Direct Taxes
• Workers Welfare Tax:
It is charged at 2% on the manufacturers having
income of Rs 100,000 and above. Employees Old Age Benefit
Scheme is financed through this fund.

• Capital Value Tax:

CVT is payable with different rates on commercial
and non commercial property, residential flats.

• Worker Profits participation Fund:

This tax is paid by the industries
having more than 10 workers at 5% of their profits for distribution
amongst workers.
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Indirect Taxes
• Custom Duties:
Customs duties are imposed on goods imported into
Pakistan. It contributes 24.4% in the indirect taxes and 15% in total
taxes collected by FBR. The composition of gross customs duty
collection is provided as following:
1. Import Duties
2. Warehouse Surcharge
3. Misc (auctions, recovery of arrears, defense etc)
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Indirect Taxes
• Federal Excise:
Federal Excise Duties are imposed on domestic
production and services rendered in the country. The major
excisable commodities include cigarettes, cement, beverages,
natural gas and oil and gas products.

• Sales Tax:
A sales tax is a consumption tax charged at a point of
purchase of certain goods and services. The tax amount is usually
calculated by applying a percentage rate to the price of a product.
Sales Tax are commonly charged at goods but many sales taxes are
also charged on sale of services.
• The Sales Tax Rate in Pakistan stands at 17 percent.
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Provincial Taxes
• Property Tax:
Property tax is a provincial tax imposed on the value of
property. It is generally imposed at a flat rate of 10% but the tax
rates vary, depending on the province.
1. Property tax is imposed at progressive rates in the Punjab
province.
2. In the province of Sindh, property tax is imposed at a flat rate of
20% on the annual rental value of the land and building

• Other provincial taxes includes excise duties, vehicle token, stamp

duties etc
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Thank You