There is a good new for digital entrepreneurs and startups in Pakistan. The Federal Board of Revenue (FBR) Pakistan has decide to reduce sales tax on the online business in Pakistan.
According to the new FBR reforms, government will implement only 6% tax on earning and making money online. Website owners have to provide their sales data to FBR through online tools.
Standard sales tax rate is 17% but online payments, sales and purchase in Pakistan. Websites and other online ventures also need to get registered with FBR.
FBR will provide specified tools to implement the new tax rules for online business.
Websites that generate revenue through online earning will now be registered with FBR’s computerized system and are now required to provide the following details:
Website and other digital ventures need to provide the following details to FBR for registration to avail the reduced 6% instead of 17% standard sales tax rates.
- Domain name (Website)
- Domain name provider (Hosting/registrar)
- Service provider’s name (Owners of the online business)
- Details (address etc) of supply centers and warehouses
Many online businesses are run through social media but have no official websites. Such social media powered businesses may come under this rule if they generate revenue. They will also need to provide Social Media portal details (pages/business names), owner’s information and supply centers etc.
“Sales made through social media portals shall also be treated as covered under this sub-rule if the same are recorded through a point of sale and relevant provisions are complied with,” FBR added.
Initially, the new reforms would benefit leather and textile sectors as FBR has immediately allowed them to register and integrate though FBR’s online system.
Startups and Entrepreneurs need to provide the above listed details and avail the benefits of lowest sales tax in Pakistan.
If you run an online business or even your regular business has online payment system in which your customers shop or get your services online, you have this brilliant change to save 11% money on sales.