TAX STRUCTURE OF PAKISTAN.

PRESENTED BY
ANITA SHAHEEN
HADIYA ASHRAF
ERAJ IRSHAD
RUBAB EJAZ
INTRODUCTION OR HISTORY
 TAXATION:

• t is a means for the government in increasing its

revenue under the authority of the law, purposely used
to promote welfare and protection of its citizens.
• It is the collection of the share of individual and
organizational income by a government under the
authority of the law
Taxes in Pakistan are classified into two broad
categories:

Indirect taxes. Direct taxes

 Custom duty  Income tax

 Federal excise duty
 Sales tax
 INCOME TAX:
• An income tax is a tax imposed on individuals or entities
(taxpayers) that varies with respective income or profits
(taxable income).
SALES TAX:

A sales tax is a consumption tax imposed by the

government on the sale of goods and services. A
conventional sales tax is levied at the point
of sale, collected by the retailer, and passed on to
the government.
 Custom Duty:

 Customs Duty is a tax

imposed on imports and
exports of goods.
 Federal Excise Duty:
A percentage levied on
manufacture, sales or
use of locally goods
such as
alcoholic drinks ,
cigarette or tobacco.
 Objectives of Tax:
1. To raise government revenue for development and welfare
programmes in the country.
2. To maintain economic equalities by imposing tax to the
income earners and improving the economic condition of the
general people.
3. To encourage the production and distribution of the products
of basic needs and discourage the production and harmful
ones.
4. To discourage import trade and protect the national
industries.
 Tax Structure Of Pakistan:

CORPORATE TAX RATES Pakistan

corporate tax rate is 35% of net taxable
income of a company.
For nonresidents, a 15% rate is levied on the
gross amount of royalties Ortechnical service
fees, and 30% for other payments under the
presumptive tax regime.
Overview of Tax structure

 Proportional Tax
 Regressive Tax
 Progressive Tax
Proportional taxes

With a proportional tax, the marginal rate of

tax is constant leading to a constant average
rate of tax.
Regressive taxes

With a regressive tax, the rate of

tax paid falls as incomes rise – I.e.
the average rate of tax is lower
for people on higher incomes
Regressive taxes:

With a regressive tax, the rate of tax paid

falls as incomes rise – I.e. the average
rate of tax is lower for people on higher
incomes
Income Tax Slabs 2018-19 Salaried Persons Finance Bill 2018

1 Up to Rs1,200,000 0% tax

Rs 1,200,000 to
2 5% tax
Rs2,400,000
Rs 2,400,001 to
3 10% tax
Rs4,800,000
Rs 4,800,001 and
4 15% tax
above

The Federal Government employees along with Defense Employees in the recent
Budget 2018-19 have got a lot of benefits in which one of the most prominent
was relief in tax on salary.
In addition to taxes mentioned that are imposed by the Federation
according to the Constitution of Pakistan, the following are the taxes that
are levied by the provinces.

• Agriculture income tax

• Sales tax on services
• Taxes on the transfer of immovable property
• Professional tax
• Tax on luxury houses
• Tax on registration of luxury vehicles etc.
• Property tax
How to boost tax collection

The government must go for

fundamental reforms to replace the
outdated and complex system with a
simple, certain and low-rate taxation
How to improve tax system
 Initiate education of taxpayers and withholding
agents through a well- integrated programme of
media campaign, booklets and brochures.
 Simplify and standardize the process of
issuance of exemption certificates.
 Avoid introducing tax amnesty schemes
 Areas of Improvement
Pakistan is a country where tax avoidance is high, and
only a limited number of people / organizations pay tax.
 Why we do not pay taxes
 Lack of tax culture or tax education is the next most
important cause of corruption in the private sector
 Issuance of exemption certificates Areas of
Improvement
conclusion