Pakistan operates a VAT-style system, primarily under the name General Sales Tax (GST), although it is widely referred to simply as sales tax. Introduced through the Sales Tax Act, 1990, GST applies to the supply and import of taxable goods at the federal level and to services at the provincial level.
The Federal Board of Revenue (FBR) administers GST on goods, while provincial revenue authorities — such as the Punjab Revenue Authority (PRA), Sindh Revenue Board (SRB), Khyber Pakhtunkhwa Revenue Authority (KPRA), and Balochistan Revenue Authority (BRA) — are responsible for services within their jurisdictions.
GST functions much like a traditional VAT system, allowing businesses to offset input tax against output tax. Standard GST rates vary depending on the type of goods or services and the province in which they are supplied. Compliance involves registration, issuing tax invoices, and regular filing of GST returns with the relevant tax authority.
