6 Ways You Can Save Money By Filing Tax Returns in Pakistan

Since the percentage of Pakistanis who file income taxes is a mere 1%, the government has been taking steps which could push more people to submit their tax returns, albeit in the form of saving on withholding and advance income taxes.

These taxes are pretty high for income tax non-filers and you often end up paying huge amounts for everyday tasks, services and products. The government incentive here is that you can start filing returns and pay less withholding taxes. These can be reimbursed at the end of the year, saving you thousands of rupees each month.

So here’s a list of activities where you will save on withholding taxes if you file your tax returns. The list mentions the activity/business and the applicable tax on both, filers and non-filers:

Personal Activities

Even common tasks which do not relate to any company or organization are now charged taxes and non-filers are especially asked to pay WHT even when there’s no similar tax on filers.

Here’s the breakdown:

  • On Winning a Prize Bond, Quiz Bond or Crossword Puzzle: Filer – 15%, Non-filer – 20%
  • Transfer of property: Filer – 1%; Non-filer – 2%
  • Advance Tax on purchase of property:
    • Immoveable property worth upto Rs. 4 million: No tax
    • Immoveable property worth over Rs. 4 million Filer – 2%; Non-filer 4%
  • Tax on General Insurance Premium and Life Insurance Premium:
    • General Insurance Premium: Non-filers – 4%
    • Life Insurance Premium (Over 0.2 million annual): Non-filers 1%

Banking Transactions

Every bank transaction you perform is also taxed based on the amount you send or cash out. The tax amounts are listed below:

  • On cash withdrawal (Over Rs. 50,000): Filer – 0.3%, Non-filer – 0.6%
  • On Demand Draft, Payment Order, CDR, STDR, RTC or similar instrument (Over 25,000): Filer – 0.3%, Non-filer – 0.6%
  • On Online money transfer or other electronic mail (Over 25,000): Filer – 0.3%, Non-filer – 0.6%
  • Advance tax on sale of demand draft, pay order etc.: Filer – 0%; Non-filer 0.6%
  • All bank transactions: Filer – 0%; Non-filer 0.6%

Motor Vehicles

Most activities related to motor vehicles also include withholding tax (WHT) based on a person’s status as a filer or non-filer, where the latter are taxed higher:

  • Registration of a vehicle:
    • Upto 850cc: Filer – Rs. 10,000; Non-Filer – Rs. 10,000
    • 851cc to 1000cc: Filer – Rs. 20,000; Non-Filer – Rs. 25,000
    • 1001cc to 1300cc: Filer – Rs. 30,000; Non-Filer – Rs. 40,000
    • 1301cc to 1600cc: Filer – Rs. 50,000; Non-Filer – Rs. 100,000
    • 1601cc to 1800cc: Filer – Rs. 75,000; Non-Filer – Rs. 150,000
    • 1801cc to 2000cc: Filer – Rs. 100,000; Non-Filer – Rs. 200,000
    • 2001cc to 2500cc: Filer – Rs. 150,000; Non-Filer – Rs. 300,000
    • 2501cc to 3000cc: Filer – Rs. 200,000; Non-Filer – Rs. 400,000
    • Above 3000cc: Filer – Rs. 250,000; Non-Filer – Rs. 450,000
  • Transfer of registration or ownership of a vehicle:
    • Upto 850cc: Filer – Rs. 0; Non-Filer – Rs. 5,000
    • 851cc to 1000cc: Filer – Rs. 5,000; Non-Filer – Rs. 15,000
    • 1001cc to 1300cc: Filer – Rs. 7,500; Non-Filer – Rs. 25,000
    • 1301cc to 1600cc: Filer – Rs. 12,500; Non-Filer – Rs. 65,000
    • 1601cc to 1800cc: Filer – Rs. 18,750; Non-Filer – Rs. 100,000
    • 1801cc to 2000cc: Filer – Rs. 25,000; Non-Filer – Rs. 135,000
    • 2001cc to 2500cc: Filer – Rs. 37,500; Non-Filer – Rs. 200,000
    • 2501cc to 3000cc: Filer – Rs. 50,000; Non-Filer – Rs. 270,000
    • Above 3000cc: Filer – Rs. 62,500; Non-Filer – Rs. 300,000
  • At the time of sale of new vehicle (from manufacturer):
    • Upto 850cc: Filer – Rs. 10,000; Non-Filer – Rs. 10,000
    • 851cc to 1000cc: Filer – Rs. 20,000; Non-Filer – Rs. 25,000
    • 1001cc to 1300cc: Filer – Rs. 30,000; Non-Filer – Rs. 40,000
    • 1301cc to 1600cc: Filer – Rs. 50,000; Non-Filer – Rs. 100,000
    • 1601cc to 1800cc: Filer – Rs. 75,000; Non-Filer – Rs. 150,000
    • 1801cc to 2000cc: Filer – Rs. 100,000; Non-Filer – Rs. 200,000
    • 2001cc to 2500cc: Filer – Rs. 150,000; Non-Filer – Rs. 300,000
    • 2501cc to 3000cc: Filer – Rs. 200,000; Non-Filer – Rs. 400,000
    • Above 3000cc: Filer – Rs. 250,000; Non-Filer – Rs. 450,000
  • Private motor vehicle tax:
    • Upto 1000cc: Filer – Rs. 800; Non-Filer – Rs. 1,200
    • 1001cc to 1199cc: Filer – Rs. 1,500; Non-Filer – Rs. 4,000
    • 1200cc to 1299cc: Filer – Rs. 1,750; Non-Filer – Rs. 5,000
    • 1300cc to 1499cc: Filer – Rs. 2,500; Non-Filer – Rs. 7,500
    • 1500cc to 1599cc: Filer – Rs. 3,750; Non-Filer – Rs. 12,000
    • 1600cc to 1999cc: Filer – Rs. 4,500; Non-Filer – Rs. 15,000
    • 2000cc & above: Filer – Rs. 10,000; Non-Filer – Rs. 30,000
  • Annual tax for transport service providers:
    • Goods transport capacity: Filer Rs. 2.5/kg; Non-filer: Rs. 4/kg
    • Vehicle with laden weight capcity of over 8,120kg: Rs. 1,200
  • Passenger transport service providers:
    • Capacity between 4 to 9 passengers: Filer – Rs. 50 per seat, Non-filer Rs. 100 per seat
    • Capacity between 10 to 19 passengers: Filer – Rs. 100 per seat, Non-filer Rs. 200 per seat
    • Capacity of 20 passengers or more: Filer – Rs. 300 per seat, Non-filer Rs. 500 per seat

Profits

  • Income on dividend/payment of dividend: Filer – 12.5%, Non-filer – 20%
  • Income on Sukuk: Filer – 10% to 15%, Non-filer – 17.5%
  • Profit on National Savings Scheme or Post Office Savings: Filer – 10%, Non-filer – 17.5% (Over Rs. 5 lacs)
  • Profit on debt paid by banking company: Filer – 10%, Non-filer – 17.5% (Over Rs. 5 lacs)
  • Profit on bonds , certificates, debentures, securities: Filer – 10%, Non-filer – 17.5% (Over Rs. 5 lacs)
  • On extraction of minerals from mines: Filer – 0%; Non-filer – 5%
  • On brokerage or commission:
    • Advertising agents: Filer – 10%, Non-filer 15%
    • Life Insurance Agents (Commission under Rs. 5 lacs): Filer – 8%, Non-filer 16%
    • People not covered in the above two points: Filer – 12%, Non-filer 15%

Payments to Non-Residents

When any Pakistani makes a payment to non-residents or non-resident’s company through a contract, the following difference in taxes applies to filer and non-filers:

  • On construction related contracts: Filer – 7%, Non-filer – 12%
  • On other services and TV advertisements: : Filer – 7%, Non-filer – 12%
  • Sale of goods (Company): : Filer – 4%, Non-filer – 6%
  • Sale of goods (Other than company): Filer – 4.5%, Non-filer – 6.5%
  • On Providing Services (Company): Filer – 8%, Non-filer – 12%
  • On Providing Services (Other than company): Filer – 10%, Non-filer – 15%
  • Execution of any other contract: Filer – 7%, Non-filer – 12%

Local Payments

When any business person makes a payment to local residents or companies, the following difference in taxes applies to filer and non-filers:

  • On supply by distributors: Filer – 3%, Non-filer 3.5%
  • On sale of other goods (Company): Filer – 4%, Non-filer – 6%
  • On sale of other goods (Other than company): Filer – 4.5%, Non-filer – 6.5%
  • Payments to Electronic or Print Media for ads: Filer – 1.5%, Non-filer – 12 to 15%
  • On transport services (Company): Filer – 8%, Non-filer – 12%
  • On transport services (Other than company): Filer – 10%, Non-filer – 15%
  • Execution of any other contract (Company): Filer – 7%, Non-filer – 10%
  • Execution of any other contract ( Other than company): Filer – 7.5%, Non-filer – 10.5%
  • On selling petroleum products to a petrol pump: Filer – 12%, Non-filer – 15%

He is the Editor at ProPakistani.


  • Aneef Izhar

    In case of WHT for purchase/registration of car, WHT is to be paid only once. Here you have mentioned WHT for two scenarios: One at the time of Registration, while one at the time of sale of vehicle(from manufacturer). These days only the WHT at the time of sale of vehicle from manufacturer is to be paid. The manufacturer collects the WHT and gives a ITC Certificate to the owner which the owner has to furnish on the registration of the vehicle.

  • Muhammad Ashraf

    correction wht on all banking transaction over 50000 not 25000

  • SSyar

    Good article after a long time., on ProPak

  • Junaid

    this country got billion of dollars in foreign aid, where all that money went no clue, remember qarz utaro mulk sanwaron scheme, where all that money went, no clue, Yeah pay your taxes, so they can also end up in panama and Swiss banks

  • Muhammad Yasir

    absolutely HATE it when taxes are mentioned

    almost NONE of that money goes to any good … NONE of the Elite ever pay their damn taxes and only honest , earnest people like us are made to pay taxes that do not even go towards improving the country !

    for instance , i’ve seen this damn road in DILAPIDATED condition for a few YEARS now … NO ONE from the concerned authorities EVER takes action to fix that … that’s our tax rupees at work :/

    absolutely HATE this country’s taxation policies

  • Ali Salman

    I have overlooked this article but what about taxes on import of cars for non-resident Pakistanis who pay property tax in Pakistan, can show legal remittance transfers.

  • ایک غریب

    Collecting WHT is a crime in my view. It show Govt/FBR incompetency to find and enlist all the rich/elites who’s income is well above taxable limit.
    Instead they always come with blanket solutions i.e similar tax on everyone.
    In theory tax should be higher on rich and less on poor, but here it’s inverted :(
    For example how can that be justified to forcefully ripoff a poor with such high 14% WHT on mare Rs.30 mobile load? and let elite withdraw such huge amount (50K+) with mare 0.6% tax?

    Think about it.

  • Zahid

    Very good article

  • Affan

    It Should more visible if you wrote it in a tabular form

  • Anonymous

    How to file taxes and get withholding tax back.
    Please elaborate for simple people like me.

  • Muhammed Ovais Alam

    Elite class, (most) businessman and politicians don’t care about tax.

  • Muhammad Habib

    Very helpful for me,.

    Thanks pro team…