Startups are at the heart of innovation and economic growth in Pakistan, rapidly transforming industries from fintech and e-commerce to edtech and healthtech. However, while founders focus on building products, acquiring users, and raising funding, many overlook the importance of financial management and tax compliance. Ignoring these essentials can lead to penalties, loss of investor trust, and even business failure.
This article outlines the bookkeeping and tax-related services that every startup in Pakistan needs throughout the year—whether bootstrapped or funded—to ensure financial stability, compliance, and scalability.
Keeps financials clean for investor due diligence
Helps track burn rate and extend runway
Ensures legal compliance with FBR, SECP, and provincial tax authorities
Supports better budgeting, fundraising, and decision-making
Avoids heavy fines, audits, and unnecessary legal trouble
Record daily expenses, income, and cash transactions
Categorize revenue streams (subscriptions, product sales, service income)
Maintain expense classifications (R&D, marketing, payroll, overhead)
Reconcile bank, credit card, and digital wallet statements
Process employee and contractor payments
Deduct income tax under Section 149
Prepare salary slips
Manage contributions to EOBI, Social Security (if applicable)
Deduct applicable withholding tax (e.g., on rent, services) under Section 153
Maintain WHT statements and certificates
Deposit withheld tax into FBR accounts via CPR
Register for sales tax if providing taxable goods or services
File monthly sales tax returns (STRN)
Maintain input and output tax ledgers
Reconcile invoices and tax payments
Generate income statements, balance sheets, and cash flow reports
Review KPIs like CAC, LTV, burn rate, and runway
Help in strategy review and investor updates
Estimate and pay quarterly advance income tax (if applicable)
Avoid default surcharge by complying with Section 147
Prepare cash flow forecasts
Review budgets vs. actuals
Plan for fundraising or debt financing
Optimize costs and set financial goals
File annual tax return under Section 114
Submit wealth statement and reconciliation (Form 116) for directors
File separate returns for the company and individual founders (if salaried)
Prepare audited or unaudited financial statements based on startup size and funding
Comply with IFRS for SMEs or full IFRS depending on investor or regulatory requirement
File Form A (Annual Return)
File Form 29 in case of change in directors, shareholding, or business structure
Hold Annual General Meeting (AGM) and prepare board resolutions
Support external audit, if required by investors, SECP, or grants
Provide reconciled ledgers, bank statements, and payroll records
Assist in due diligence documentation for funding rounds
Register startup as a Private Limited Company with SECP
Obtain NTN and STRN from FBR
Enlist with PSEB (for IT startups) to avail tax benefits and export recognition
Register with provincial revenue authorities (SRB, PRA, KPRA, BRA) if required
Apply for IT export exemption under Clause 133, Second Schedule
Get PSEB registration certificate
Avail reduced tax rates or exemption certificates from FBR
Draft replies for Section 176 (record explanation) or Section 122 (reassessment)
Represent startup before the tax department
File appeals or rectifications
Create investor-ready financial models
Build pro forma income statements, cash flows, and cap tables
Structure equity and SAFE investments for accounting and tax impact
QuickBooks Online / Xero – real-time bookkeeping and financial reporting
Zoho Books / FreshBooks – affordable accounting for small teams
Google Sheets or Excel – for budget modeling and KPI tracking
Trello / Notion – to manage financial tasks and documents
Tax Asaan / IRIS portal – for tax registration and return filing
Access to expert accountants and tax advisors without full-time cost
Timely compliance and filings
Improved investor confidence through proper financial documentation
Reduced risk of tax notices or audits
Better cash flow tracking and tax planning
Look for professionals experienced with startups, SECP, and FBR laws
Understand their familiarity with fundraising, SAFE notes, and cap tables
Check if they offer cloud-based or virtual services
Ensure they can handle both compliance and advisory work
Evaluate responsiveness and reporting capabilities
Q: Should a startup register for sales tax immediately?
Only if it offers taxable services or goods exceeding the threshold (currently Rs. 7.5 million in some provinces). IT/Software startups may be exempt if registered with PSEB.
Q: Can I manage startup bookkeeping myself?
Yes, but it’s advisable to engage professionals early for accuracy and compliance, especially when scaling or fundraising.
Q: Are tech startups eligible for tax exemption in Pakistan?
Yes. Registered IT/ITeS startups certified by PSEB and recognized by FBR may claim income tax exemption up to June 2025.
Q: What financial records do I need to raise funding?
You’ll need clean income statements, balance sheets, tax returns, cap tables, and cash flow projections.
Q: Do startup founders need to file personal tax returns?
Yes. If they draw salaries or own shares, they must declare income and file returns individually.
Startups move fast—but ignoring bookkeeping and tax can bring your momentum to a halt. Clean financial records, timely tax filings, and structured compliance are essential for investor trust, sustainable growth, and legal safety. Whether you’re bootstrapped or funded, product-focused or scaling, professional bookkeeping and tax services can help your startup stay financially sound and future-ready.
