Commerce Ministry proposed harmonized provincial sales tax for online business

Commerce Ministry proposed harmonized provincial sales tax for online business
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ISLAMABAD - The Commerce Ministry has proposed harmonized provincial sales tax regime through the application of uniform sales tax rates on services by avoiding double taxation and simplifying the filing procedure for online businesses under the draft e-commerce policy.

The currently applicable rates of sales tax in Punjab, Sindh, KPK and Balochistan are 16%, 13%, 15% and 15% respectively. In general, the procedures for the filing of sales tax returns are also cumbersome and complicated; however, this may not be the case with an online business having transactions’ data recorded in digital format, maintained the draft policy.

The ministry has proposed:

(i) Harmonized provincial sales tax regimes through the application of uniform sales tax rates on services and avoiding double taxation.

(ii) Simplified filing procedure through the introduction of a one-paged sales tax return form.

The cabinet is likely to approve the policy next week.

The Commerce Ministry, in consultation with other stakeholders, has finalized E-commerce policy framework to create an enabling environment for holistic growth of e-commerce across all sectors of the country, with a special focus on development and promotion of SMEs to transform Pakistan into a significant player in the regional and global digital economy.

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