Pakistan

Individual - Other taxes

Last reviewed - 22 July 2022

Super Tax on High Earning Persons

 

From tax year 2022 and onwards, super tax is imposed on high earning persons having ‘income’ of more than PKR 150 million. Income of a person for that matter comprise of his taxable income under all head of income including profit on debt, dividend, capital gain, brokerage / commission and imputable income.

 

The rate of super tax is as under:

 

Slabs

2022 & onwards

Income exceeds PKR 150 million but does not exceed PKR 200 million

1

Income exceeds PKR 200 million but does not exceed PKR 250 million

2

Income exceeds PKR 250 million but does not exceed PKR 300 million

3

Where income exceeds PKR 300 million

4

 

 

Enhanced super tax rate of 10% is applicable for certain specified sectors for tax year 2022 or 2023 only. For detail, please refer to ‘Taxes on corporate income’ section.

 

The taxpayers shall be required to pay this tax along with the return of income. In case of failure to

do so, the tax authorities are empowered to recover the same through self- contained provisions.

 

Tax on value of capital assets in Pakistan

 

A resident person owning immovable property in Pakistan will be taxed on deemed income for tax year 2022 and onwards. Such deemed income shall be computed as 5% of the Fair Market Value of the immovable property. The rate of tax on such income is prescribed as 20%. This translates into an effective tax at 1% of Fair Market Value of immovable property.

 

Certain exclusions have been provided for immovable properties for the purpose of this tax, that includes:

 

  • one immovable property owned by the resident person;

 

  • self-owned business premises from where the business is carried out by the persons appearing on the active taxpayers’ list at any time during the year;

 

  • self-owned agriculture land where agriculture activity is carried out by person excluding farmhouse (defined in a specified manner) and land annexed thereto;

 

  • immovable property allotted to (a) a shaheed or dependents of a shaheed belonging to Pakistan Armed Forces; (b) a person or dependents of the person who dies while in the service of Pakistan armed forces or Federal or provincial government; (c) a war wounded person while in service of Pakistan armed forces or Federal or provincial government; or (d) an ex-serviceman and serving personnel of armed forces or ex-employees or serving personnel of Federal and provincial governments, being original allottees of the capital asset duly certified by the allotment authority;

 

  • any immovable property from which income is already chargeable to income tax;

 

  • immovable property in the first tax year of acquisition where tax advance tax on purchase has been paid;

 

  • where the fair market value of the immovable property does not exceed PKR 25 million;

 

  • immovable property owned by a provincial government or a local government; or

 

  • immovable property owned by a local authority, a development authority, builders and developers for land development and construction, subject to the condition that such persons are registered with Directorate General of Designated Non-Financial Business and Professions.

Social security contributions

Nominal social security and Employees Old Age Benefit contribution is collected from the employers. Employee is also responsible for a nominal contribution in respect of Employees Old Age Benefit.  Employers are responsible to collect and pay on a monthly basis.

Consumption taxes

Value-added tax (VAT)

VAT (locally termed as ‘sales tax’) is ordinarily levied at 17% on the value of goods, unless specifically exempt, alter allowing related input credits. Provinces levy sales tax on certain services. See the Other taxes section in the Corporate tax summary for more information.

Net wealth/worth taxes

There are no net wealth/worth taxes in Pakistan.

Inheritance, estate, and gift taxes

There are no inheritance, estate, or gift taxes in Pakistan.

Property taxes

Property owners are required to pay property tax levied and collected by provincial governments through municipal governments at varying rates.

Stamp taxes

Stamp duty is a provincial levy and is collected on property registrations, property transfers, shares transfers, power of attorneys, etc.

Registration taxes

Registration tax is a provincial tax and payable mainly on registration of property and vehicles.