Pakistan’s tax system varies compared to other countries in the world. However, some general similarities and differences include:
- Most countries have a tax system that requires individuals and businesses to pay taxes on their income and other taxable sources.
- Tax laws and regulations are enforced by the government to ensure compliance.
- Tax rates and structures can vary greatly from country to country. For example, some countries may have a flat tax rate for all income levels, while others may have a progressive tax system with higher rates for higher earners.
- Different countries have different deadlines for filing tax returns and paying taxes.
- Some countries offer tax incentives and benefits for specific groups, such as individuals with low income or businesses engaged in certain activities.
- The types of taxes that are levied can vary, such as value-added tax, property tax, and inheritance tax.
- In Pakistan, the tax system includes various types of taxes, such as income tax, sales tax, and federal excise duty, and has progressive tax rates for individuals and companies. The deadline for filing tax returns is June 30th each year, and tax laws are enforced by the Federal Board of Revenue (FBR).
To avoid double taxation, convention was formulated between representatives other countries and representatives of Government of Pakistan. The convention with Pakistan follows in general the pattern of income-tax conventions presently in force between the United States and a number of foreign countries, namely, Australia, Belgium, Canada, Denmark, Finland, France, the Federal Republic of Germany, Greece, Honduras, Ireland, Italy, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the Union of South Africa, and the United Kingdom.