Taxes in Pakistan have a large spectrum which include taxes at muncipal level upto Federal Level. Legislation and Law exists to regulate all type of taxation. A broad description regarding the nature of administration of these taxes is explained below:
Direct taxes primarily comprise income tax, alongwith supplementary role of wealth tax. For the purpose of the charge of tax and the computation of total income, all income is classified under the following heads:
- Interest on securities;
- Income from property;
- Income from business or professions
- Capital gains; and
- Income from other sources.
All individuals, unregistered firms, associations of persons, etc., are liable to tax, at the rates randing from 10 to 35 per cent.
Tax on Companies
All public companies (other than banking companies) incorporated in Pakistan are assessed for tax at corporate rate of 35%. However, the effective rate is likely to differ on account of allowances and exemptions related to industry, location, exports, etc.