PakistanEconomy'sBlogFOR

FEEDBACK:CLAMOURHUT@HOTMAIL.COM
16JAN

TaxesinPakistan
PostedJanuary16,2010bybasilisktinEconomicDevelopment.14Comments

(hps://pakistaneconomy.les.wordpress.com/2010/01/2201024589_3f9b2894d41.jpg) Governmentearns
revenuethroughplentyofwayslikeinterests,dividends,tradingprotsetcandtaxisoneofthe
primarytoolofrevenueinabovementionedways.Someonerightlydescribestaxas;
Aneisataxfordoingsomethingwrongwhilsttaxisanefordoingsomethingright.
Pakistan,thestateof180,800,000peoplecollectedthetotaltaxrevenueofRs1,317,857millionsaccording
toBudgetestimate(B.E)200809whichislessthansatisfactoryandwitnessedactualslowinrealterm.I
willbeginmywritingwithOgdenNashsstanza
Themoreyouearn,thelessyoukeep,
AndnowIlaymedowntosleep.
IpraytheLordmysoultotake,
IfthetaxcollectorhasntgotitbeforeIwake.
ThesourcesoftaxrevenueinPakistanare:
FederalTaxes
ProvincialTaxes
1.FederalTaxes

(hps://pakistaneconomy.les.wordpress.com/2010/01/55.jpg)
LetstakeadetailedviewofdirectandindirecttaxesofPakistan.
IncomeTax
Itiskindofdirecttaxthatislivedonapersonhavingincomemorethanthecertainlevel.Accordingto
Plato:
Whenthereisanincometax,thejustmanwillpaymoreandtheunjustlessonthesameamountof
income.

(hps://pakistaneconomy.les.wordpress.com/2010/01/54.jpg)
TherevisedslabsfortaxableincomethroughFinanceAct2008aregivenbelow;
S.
No.

Taxableincome

Rateoftax.

(1)

(2)

(3)

1.

Wheretaxableincome
doesnotexceed
Rs.180,000Forwomen
taxpayeritisRs.240,000.

0%

2.

Wherethetaxable
income
exceedsRs.180,000but
doesnotexceed

0.50%

Rs.250,000
3.

Wherethetaxable
income
exceedsRs.250,000but
doesnotexceed

0.75%

Rs.350,000
4.

Wherethetaxable
income
exceedsRs.350,000but
doesnotexceed
Rs.400,000

1.50%

Rs.400,000
5.

Wherethetaxable
income
exceedsRs.400,000but
doesnotexceed

2.50%

Rs.450,000
6.

Wherethetaxable
income
exceedsRs.450,000but
doesnotexceed

3.50%

Rs.550,000
7.

Wherethetaxable
income
exceedsRs.550,000but
doesnotexceed

4.50%

Rs.650,000
8.

Wherethetaxable
income
exceedsRs.650,000but
doesnotexceed

6.00%

Rs.750,000,
9.

Wherethetaxable
income
exceedsRs.750,000but
doesnotexceed

7.50%

Rs.900,000,
10.

Wherethetaxable
income
exceedsRs.900,000but
doesnotexceed

9.00%

Rs.10,50,000,
11.

Wherethetaxable
incomeexceeds

10.00%

Rs.10,50,000butdoes
notexceed
Rs.12,00,000,
12.

Wherethetaxable
income
exceedsRs.12,00,000but
doesnotexceed

11.00%

Rs.1450,000,
13.

Wherethetaxable
income
exceedsRs.1,450,000but
doesnotexceed

12.50%

doesnotexceed
Rs.1,700,000,
14.

Wherethetaxable
incomeexceeds
Rs.1,700,000butdoes
notexceed

14.00%

Rs.1,950,000,
15.

Wherethetaxable
incomeexceeds
Rs.1,950,000butdoes
notexceed

15.00%

Rs.2,250,000,
16.

Wherethetaxable
incomeexceeds
Rs.2,250,000butdoes
notexceed

16.00%

Rs.2,850,000,
17.

Wherethetaxable
incomeexceeds
Rs.2,850,000butdoes
notexceed

17.50%

Rs.3,550,000,
18.

Wherethetaxable
incomeexceeds
Rs.3,550,000butdoes
notexceed

18.50%

Rs.4,550,000,
19.

Wherethetaxable
incomeexceeds
Rs.4,550,000butdoes
notexceed

19.00%

Rs.8,650,000,
20.

Wherethetaxable
incomeexceeds
Rs.8,650,000

20.00%

WorkersWelfareTax
Itischargedat2%onthemanufacturershavingincomeofRs100,000andabove.EmployeesOldAge
BenetSchemeisnancedthroughthisfund.
CapitalValueTax
CapitalValueTaxispayablebyeveryindividual,associationofpersons,rmandcompany,notbornon
theNationalTaxRegister.CurrentlyCVTispayablewithdierentratesonimmovablecommercialand
noncommercialproperty,residentialats,andpurchaseofsharesofstockexchange.
WorkerProtsparticipationFund
Thistaxispaidbytheindustrialundertakinghavingmorethan10workersat5%oftheirprotsfor

Thistaxispaidbytheindustrialundertakinghavingmorethan10workersat5%oftheirprotsfor
distributionamongstworkers.Anyleftoveramountafterdistributionamongsttheworkersisdeposited
withthegovernmenttobecomepartoftheWWF.
CustomDuties
CustomsdutiesareleviedthroughCustomsAct,1969ongoodsimportedintoPakistan.Itcontributes
24.4%intheindirecttaxesand15%intotaltaxescollectedbyFBR.Thecollectionofcustomdutiesis
importantasitalsocontributesinthebasecalculationofothertaxeslikesalestaxonimportsand
withholdingtax.Only15majorcommoditygroupscontributed78%ofthetotalcustomsdutiesduring
200708.Autosectoristhetopcontributorofthecustomsduty.Thecompositionofgrosscustomsduty
collectionisprovidedasfollowing:
1.ImportDuties
2.WarehouseSurcharge
3.ExportDevelopmentSurcharge
4.Misc(auctions,recoveryofarrears,defenseetc)
FederalExcise
FederalExciseDutiesareleviedondomesticproduction,importsandservicesrenderedinthecountry.
Themajorexcisablecommoditiesincludecigarees,cement,beverages,naturalgasandPOLproducts,
whereasexcisableservicesare;AirTravel,Insurance,NonFundServicesprovided(InFY:200708the
NFSwereextendedtofullcoverageofNonfundFinancialServices(NFS),andFEDonAirTravelwas
rationalized.)bybankingornonbanknancialcompaniesandFranchiseservices.TheoldCentral
ExcisesAct,1944hasbeenreplacedbyTheFederalExciseAct,2005,witheectfrom1stJuly,2005.As
partofbudgetarymeasuresfortheyear200708,SpecialFEDat1%hasbeenleviedongoodswhichare
manufacturedorareimportedinPakistan.
SalesTax
Salestaxisliableonsalesofallgoodsandservicesproducedinthecountryexcludingthosegoods
exemptedintheSalesTaxAct,1990.Theratestructurewasdierentfornativeproductsandimports.
Thedetailsofsalestaxcollectionatimportstagealsopointoutthehigherconcentrationasfteenmajor
commoditygroupshavecontributedaround87%oftotalST(imports)collection.Themajorcommodity
groupsincludePOLProducts(27),EdibleOil(15),Plastic(39),VehiclesandParts(87),IronandSteel
(72),MechanicalMachinery(84),ElectricalMachinery(85),OrganicChemicals(29),Paper&PaperBoard
(48),Oilseedsetc(12),MiscChemicalsProducts(38),Rubber(40),Coee,Tea,andSpices(9),Aluminum
Products(76)andArticlesofIron&Steel(73).
ProvincialTaxes

(hps://pakistaneconomy.les.wordpress.com/2010/01/53.jpg)
Conclusion
Inabovementioneddirecttaxcaptionyoumusthavebeennoticedthatthereisnowealthtaxwhichis
thoughtprovoking.Ithasbeenstoppedsince2007.Wealthtaxfor200607wereRs47m.WillDurant
rightlysays;
Ifoureconomyoffreedomfailstodistributewealthasablyasithascreatedit,theroadto
dictatorshipwillbeopentoanymanwhocanpersuasivelypromisesecuritytoall?
Oneoftheprimarymaximsoftaxationisthat,theburdenoftaxshouldfallonthepeopleaccordingto
theirability.ButinPakistanthecaseisoppositeIetaxedpoor,exemptwealthy.Wealthtaxisthebest
toolofcontrollingthealarmingrateofunequaldistributioninunderdevelopingeconomieslike
Pakistan.ButunfortunatelyeverynextgovernmentofPakistanstartsloadingitsbankaccountsrather
thanaddressingtherealproblemsofcountry.Gandhibrilliantlystates;

thanaddressingtherealproblemsofcountry.Gandhibrilliantlystates;
Thethingsthatwilldestroyusare:politicswithoutprinciple;pleasurewithoutconscience;wealth
withoutwork;knowledgewithoutcharacter;businesswithoutmorality;sciencewithouthumanity;
andworshipwithoutsacrice.
References:
hp://www.nance.gov.pk(hp://www.nance.gov.pk)
hp://www.r.gov.pk(hp://www.r.gov.pk)
StatebankofPakistan
(hp://www.addthis.com/bookmark.php?v=250&username=basiliskt)
Abouttheseads(https://wordpress.com/abouttheseads/)

14responsestothispost.
PostedbyJeR05onJune1,2010at6:18am
Iagreewithmostofwhatissaidhere.

i
RateThis

5
0

PostedbyHizextimeonJune8,2010at8:35pm
Justwanttosaywhatagreatblogyougothere!
Ivebeenaroundforquitealotoftime,butnallydecidedtoshowmyappreciationofyourwork!
Thumbsup,andkeepitgoing!
Cheers
Christian,EarnFreeVouchers/Cash

i
RateThis

7
0

PostedbyPerryEstelleonOctober27,2010at6:49am
notmanyplaceswereyoucanndthismuchcontentandvaluableinformation,thankyouforthis
post
Perry

i
RateThis

2
0

PostedbyHassanzakionNovember27,2010at11:27am
thaxman.veryinformativeandtothepoint

i
RateThis

2
0

Postedby2010inreviewPakistanEconomysBlogonJanuary2,2011at11:24am
[]TaxesinPakistanJanuary20104comments4[]

i
RateThis

1
0

PostedbysaraonFebruary18,2011at2:29pm
Thankyousir!thisbloghasdonewondersforme!

i
RateThis

2
0

PostedbyhajraonFebruary19,2011at6:04pm
thnxalot..greatblogiwasverytensdabtmyassigmntandthenigotalotofinfofrmthere

i
RateThis

2
0

PostedbyMahnoorAsimonFebruary7,2012at9:38am
Splendidblog..reallyverymuchinformative..

i
RateThis
PostedbyaafaqonFebruary22,2012at11:52pm

2
0

PostedbyaafaqonFebruary22,2012at11:52pm
thatisgoodandreliableinformationbutiwantwhypeopledonotpaytaxbecausetheyalreadypay
taxintheformforindirecttax.

i
RateThis

2
2

PostedbyZainonNovember16,2012at11:29am
outstandingblog,thereasonfornotpayingtaxes,becausetherearemanycurruptionsinour
country,whensome1ispayingtaxjustthinkingofthattheirsafetyandimprovementinour
country,butasweallknowthatthereisnoimprovementinourcountryasmuchaswethink,somay
beitsonereasonfornotpayingtaxes

i
RateThis

0
0

PostedbyShahjahanMengalonAugust30,2014at9:15pm
kindlywrite6typeofprovincialtaxeswithbriefdescription,iamindireneedofit

i
RateThis

0
0

PostedbySeHaronJanuary13,2015at2:45pm
Idntlikethispostthatmuch..
Because,localtaxesandprovincialtaxesismissinghere._

i
RateThis

1
0

PostedbysaimahonMay18,2015at9:20pm
IjustwanttosayThankyouverymuch.Thatwasveryinformativewithsomeheart.

i
RateThis
PostedbyInstaforexonJune21,2016at5:55am
Hello!

0
0

Hello!
IamanaliateprogrammanagerforInstaForexGrouptheBestBrokerinAsia.
WewouldliketooeryouthealiateprogramcooperationwithInstaForex.Ifyouareinterestedto
getinvolveinhighcommissionbasedprogram,pleasecontactmeandIwillprovidethedetails.
Ifyouhaveanyqueries,donothesitatetocontactme.

i
RateThis

0
0

BlogatWordPress.com.TheSpringLoadedTheme.