FBR to impose tax on services in Islamabad from FY2019-20


Imposition of “Tax on Services” on multiple services comes within jurisdiction of Islamabad Capital Territory from next fiscal year FY 2019-20.

According to FBR sources, the Board will impose sales tax on services comprising public relation services, corporate law consultants, and auction services while the scope of services under Islamabad Capital Territory (Tax on Services) Ordinance, 2001 has been increased considering that services which are chargeable to sales tax in provinces are not chargeable to sales tax under Islamabad Capital Territory (Tax on Services) Ordinance, 2001.

Meanwhile, last year, five percent sales tax was imposed on certain services under Islamabad Capital Territory (Tax on Services) Ordinance, 2001, including visa processing services, airport service, floral, other decoration, furnishing of space, ancillary or allied services and accessories, photography/ filmmaking services, services provided by accountants (including practicing chartered or cost accountants), auditors, actuaries, corporate tax consultants, liquidators, auctioneers and corporate law consultants, public relation services and auction services.

It is expected that lower rate of sales tax would be charged on these services at Islamabad Capital Territory, however, in last budget (2017-18), sales tax was imposed on certain services under Islamabad Capital Territory (Tax on Services) Ordinance, 2001 sources added.