The document discusses taxation in Pakistan. It provides historical background on taxation practices in ancient Egypt, Greece, and the Roman Empire. It then outlines Pakistan's current tax system, including the main taxes like income tax and sales tax. It notes that income tax is governed by the Income Tax Ordinance of 2001 and applies progressive personal and corporate income tax rates. The document also provides some statistics on Pakistan's tax system, like only 1.9 million people filing tax returns in 2014 out of a population of 190 million.

1. IN THE NAME OF ALLAH, THE MOST BENEFICENT, THE MOST MERCIFUL
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2. Fiaz Ahmad
Research Assistant
Center for Research and Development, Minhaj University Lahore
9/7/2019
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

3. INTRODUCTION
 Tax
 To tax (from the Latin taxo; "I estimate")
 Word Origin: 1250–1300;
 To impose a financial charge or other levy
 Upon Taxpayer (an individual or legal entity) by a state or the functional equivalent of a
state
 Such that failure to pay is punishable by law
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

4. Historical Background
 EGYPT
 Tax collectors were known as scribes  Tax on cooking oil
 GREECE
 War of the Athenians imposed a tax referred to as eisphora
 No one was exempted
 ROMAN EMPIRE 60 A.D
 Tax on imports and exports called portoria
 GREAT BRITAIN
 First tax assessed in England was during occupation by the Roman Empire
 Lady Godiva - 11th century
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Fiaz Ahmad, Center For Research and Development Minhaj University Lahore

5. Pakistan’s Working Machinery
 Fedral
 Income Tax Ordinance, 2001 
 Heavy Reliance (53%) on Withholding Tax
 Progressive Personal Income Tax (max rate: 20-25%)
 Corporate Income Tax (35% rate) 
 Universal Self-Assessment Scheme 
 General Sales Tax –
 Sales Tax Act, 1990 
 On Goods only
 VAT features 
 Zero Rating, also of domestic sales of exporters 
 Standard Rate of 17% 
 Exemptions to basic food items, agricultural inputs, medicines, newsprint.
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

6. Tax Facts
 Taxation in Pakistan is a complex system of more than 70 unique taxes
administered by at least 37 agencies of the Government of Pakistan.
 The government is seriously indebted -- and only 1.9 million people in a country of
190 million filed tax returns at all in 2014. An estimated 10 million people are
registered to pay taxes in Pakistan; the great majority dont pay a rupee.
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

7. Type of Taxes in Pakistan
 Income Tax - Income Tax Ordinance, 2001.
 Levied on the income of individuals or businesses (corporations or other legal entities)
 Often called a corporate tax, corporate income tax
 Individual income taxes apply on total income of the individual (with some deductions
permitted)
 Corporate income taxes often tax net income
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

8. Income Tax Law
 Law concerning taxation of income in Pakistan is stated in the Income Tax Ordinance,
2001 (the Ordinance) and the rules framed there under viz. Income Tax Rules, 2002
(the Rules).
 The Ordinance is a Central statute and is, therefore, applicable to the whole of
Pakistan.
 Under section 4 of the Ordinance, income tax is imposed for each tax year at specified
rates on every person who has taxable income for the year.
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

9. Income Tax Law
 Taxable Income
 It is the total income of a person for a tax year reduced by the total of any deductible
allowances, under the Ordinance, for the year.
 Total Income
 It is the sum of a persons income under each of the heads of income for the year.
 Residence
 An individual is considered resident for a tax year if he/she is in Pakistan for more than
182 days in that tax year
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

10. Sections
Accumulated Profit: 2(1)
The some of amount that a company save for further use and maybe divided in to the
shareholders is called accumulated profit.
Appellate Tribunal: 2(2)
If a taxpayer have a compline against the tax department ,he /she an appeal can be
made to appellate tribunal.
Approved Gratuity Fund: 2(3)
This fund is maintain by government and private organizations to gave benefits to
their employs. The amount of these funds increase year by year, this amount gave to
employee after retirement.
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

11. Sections
Pension Scheme: 2(3D)
This benefit is also given by the organization to its employs and these payments are
made periodically.
Superannuation Fund: 2(4)
The amount in this fund is continuously contributed by the employees. These amount
are paid to employees as pensions after retirement.
Assessment: 2(5)
Assessment is a process whereby the data of a person income ,expenses, tax
payments etc. Which help in calculating his final tax liability.
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

12. Sections
Assessment Year: 2(5A)
Assessment year means the period of 12 months beginning on the first day of July .
Association of persons: 2(6)
A person who is not the resident of the country but living in that country ,then the
person is treated under foreign law.
Agricultural income: (41)
The agricultural income means income derived from land ,land is situated in Pakistan
,and land is used for agricultural purposes.
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

13. What is Business and is types ???
Definition:
Any legal economic activity that is made for earning profit is called Business.
Trading :
The purchase and sale of goods to earn profit is called trading business.
Manufacturing:
In this business we buy raw material and convert it in to a finished and semi finished
goods.
Services:
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

14. What is Business and is types ???
Services:
In this type of business we provide different types of services to our costumers like
banks ,Hospitals etc.
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore

15. Thank You So
Much
Any Question ?????
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Fiaz Ahmad, Center For Research and Development Minhaj
University Lahore