KP to adopt fixed sales tax on services for lawyers

PESHAWAR: The Khyber Pakhtunkhwa government has decided to adopt fixed sales tax on services for lawyers and customs agents instead of percentage.

The decision was taken in a meeting held between the Adviser to the Chief Minister on Finance Muzzammil Aslam and Director General Khyber Pakhtunkhwa Revenue Authority (KPRA) Fouzia Iqbal.

It was decided that KPRA would send recommendations to the advisor for finance to switch lawyers and customs agents from the percentage regime of Sales Tax on Services to fixed rates by amending the Khyber Pakhtunkhwa Sales Tax on Services Act 2022 in the upcoming budget for the next financial year.

The decision was taken to provide an easy way for the custom agents and lawyers to efficiently pay their sales tax on services.It was decided that rates for the fixed tax would be adopted as per the recommendations sent by the KPRA team to the Finance Department for the budget. The lawyers will be allowed to submit one-time fixed sales tax on services at the time of filing their Wakalatnama or Power of Attorney for each case at the courts while for customs agents, a fixed amount on each Goods Declaration will be paid to KPRA as sales tax on services.

Currently, 2 percent sales tax on services is levied on lawyers while an 8 percent sales tax on services tax is levied on custom agents. “We want to make tax payments easier for everyone in the province and at the same time we have to bring them under the tax net as per law,” said Adviser to CM on Finance Muzzammil Aslam. He added that a fixed regime would be adopted for wedding halls, beauty parlors as well.

“It will make tax payments easier for the business community and service providers in the province and will make a conducive environment for businesses in the province,” he said. KPRA Director General Fouzia Iqbal said that her team welcomed the business-friendly policies of the government and that her team would be available to assist every taxpayer.