Taxation is the means by which the government raises income to cover necessary expenses. A tax is a compulsory financial charge imposed on individuals or entities by the government. In Pakistan, federal taxes are classified into two broad categories: Direct taxes and Indirect taxes.
Direct taxes are paid directly to the government by individuals or organizations and primarily include:
Indirect taxes are levied on goods and services, including:
The government uses tax revenues to facilitate public works and services and to build and maintain infrastructure. Taxes support economic advancement and societal well-being. While payment of taxes at government-imposed rates is mandatory, tax evasion (deliberate failure to pay full tax liabilities) is punishable by law. Conversely, tax avoidance (legal actions to minimize tax liability) is permissible.
Tax evasion and fraud are significant issues in Pakistan. The Federal Board of Revenue (FBR) is the authority responsible for tax collection and enforcement. The laws governing this system include the Income Tax Ordinance 2001, Income Tax Rules 2002, Sales Tax Act 1990, Sales Tax Rules 2006, and Federal Excise Act 2002.
Taxes are a universal reality and a duty of every individual and business. Despite their complexity, specialized tax lawyers are essential due to the intricate nature of tax law.
Virtually every business decision today has tax consequences. You deserve practical, well-crafted tax solutions. Our law firm offers a comprehensive range of services, from completing tax returns under corporation tax and self-assessment to complex consultancy assignments and strategic tax planning.
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