Taxation of Printing and Publishing Businesses in Pakistan

The printing and publishing industry in Pakistan serves a broad range of sectors, including education, media, government, corporate communications, packaging, and advertising. It includes businesses involved in printing newspapers, books, journals, labels, packaging materials, and commercial brochures. With the rise of digital printing and packaging demand, this sector has diversified considerably.

Taxation of printing and publishing businesses in Pakistan is governed by both federal and provincial laws. Depending on the nature of goods or services provided, such businesses may be subject to income tax, sales tax on goods, sales tax on services, and withholding taxes.

This article provides a complete overview of the taxation framework applicable to printing presses, publishing houses, and packaging firms in Pakistan.

Key Regulatory Authorities

1. Federal Board of Revenue (FBR)

• Governs income tax

• Governs sales tax on goods (e.g., books, printed packaging, labels)

• Oversees withholding tax compliance

2. Provincial Revenue Authorities

• Collect sales tax on services where printing is classified as a service (especially digital or commercial printing)

• Authorities include:

  • Punjab Revenue Authority (PRA)

  • Sindh Revenue Board (SRB)

  • KP Revenue Authority (KPRA)

  • Balochistan Revenue Authority (BRA)

Classification of Printing and Publishing Activities

1. Printing of Books, Newspapers, Educational Materials

   • Generally treated as supply of goods

   • Sales tax exempt under FBR’s Sixth Schedule (e.g., textbooks, newspapers)

2. Commercial Printing and Advertising Material

   • Treated as supply of goods if sold as tangible items

   • Treated as service if customer supplies content and printing is on-demand (e.g., flyers, brochures, banners)

3. Digital Printing & Graphic Design Services

   • Treated as taxable services under provincial laws

4. Publishing Houses (Books, Magazines, Journals)

   • Exempt from sales tax on printed educational content

   • Subject to income tax and other compliance obligations

5. Packaging and Label Printing

   • Treated as manufacturing or supply of goods and taxed under FBR

   • Frequently used in FMCG, pharma, textile industries

Income Tax on Printing and Publishing

Applicability

All printing and publishing businesses, whether manufacturers, printers, or service providers, are taxed under the Income Tax Ordinance, 2001.

Key Features

Allowable Deductions

Businesses can deduct:

• Salaries and wages

• Paper, ink, machinery, and printing materials

• Rent, electricity, and fuel

• Repairs, depreciation, and leasing of printing equipment

• Software and design tools

• Marketing and distribution costs

Filing Obligations

• Income tax return (annually)

• Advance tax (quarterly for companies)

• Wealth statement (for individuals)

• Audited accounts if turnover exceeds Rs. 100 million

Sales Tax on Goods (FBR Jurisdiction)

Taxable Printing Supplies

• Printed packaging

• Commercial flyers, brochures

• Tags, labels, shopping bags

• Calendars, diaries, promotional material

• Custom-printed boxes

These items are subject to 18% General Sales Tax (GST) under the Sales Tax Act, 1990, unless specifically exempt.

Exempt Printing Goods

The following are exempt under the Sixth Schedule of the Sales Tax Act:

• Books and printed materials for education

• Newspapers and periodicals (registered under the Press and Publication Ordinance)

• Holy Qur’an and religious publications

• Stationery for students (if listed under exemption SROs)

Compliance

• Sales Tax Registration Number (STRN) from FBR is mandatory

• Monthly GST returns through IRIS portal

• Tax invoices must be issued showing output tax

• Input tax adjustment allowed for purchases like paper, ink, machinery (if goods are taxable)

Sales Tax on Services (Provincial Jurisdiction)

Taxable Services

If printing is done as a service, where the client provides content and only printing is performed, it is taxed as a service.

Taxable printing services include:

• Digital on-demand printing

• Print and delivery services

• Design and printing of banners, signage, stationery

• Personalized invitation or certificate printing

• Outsourced printing contracts from businesses

Sales Tax Rates on Services

Dual Nature Businesses

If a business is involved in both supply of printed goods and printing services, it must register with both FBR and the relevant provincial authority, and apportion taxable income accordingly.

Filing Requirements

• STRN from PRA/SRB/KPRA/BRA

• Monthly service tax returns

• Issue proper sales tax invoice

• Input tax adjustment available only for taxable portion

Withholding Tax Obligations

Printing and publishing businesses often serve government departments, corporations, and large organizations. In such cases, withholding tax is deducted by clients.

Withholding agents must file monthly statements and deposit taxes via the FBR Iris portal.

Exemptions and Reliefs

Exempt Goods (Zero or Reduced Rate)

• Books for school/college use

• Newspapers and registered periodicals

• Holy Qur’an, religious literature

• Printing for charitable institutions (under exemption notification)

Tax Reliefs

• Export-oriented printers (e.g., packaging for exports) may claim zero-rating or tax refunds

• Import of printing machinery may be exempt from customs duties under industrial incentive SROs

• Non-profit educational publishers may qualify for income tax exemption under Section 100C

Common Issues in Taxation of Printing Businesses

• Misclassification of service vs. goods (leading to tax disputes)

• Failure to register with both FBR and PRA/SRB when required

• Improper input tax adjustment for exempt printing

• Withholding tax not deducted by clients on small contracts

• Cash-based operations and non-issuance of tax invoices

Compliance Checklist

Recommendations for Printers and Publishers

• Properly categorize goods vs. services for each project

• Issue separate invoices for exempt and taxable items

• Register with both FBR and Provincial Authorities as needed

• Deduct and deposit withholding tax when paying rent or contractors

• Maintain purchase records for input tax adjustment

• Engage a tax consultant to avoid double taxation and ensure correct apportionment

Conclusion

Printing and publishing businesses in Pakistan face a mixed tax regime due to the dual nature of their operations involving goods and services. While educational and religious printing enjoys exemptions, commercial and promotional printing is fully taxable. Businesses must register with the correct authorities, maintain proper documentation, and ensure timely filing of income and sales tax returns to remain compliant and avoid penalties.

Understanding the difference between taxable goods and taxable services is key to optimizing tax treatment and sustaining long-term operations in the industry.