Late Return Filing

Late return filing or failure to file will result in an interest penalty of 0.1% per day on the tax due. The minimum penalty is PKR 5,000 and the maximum is 25% of the tax due.

Late Payment

Pakistan imposes an interest penalty for late payment at a rate of 0.1% per day on the tax due. The minimum penalty is PKR 500 and the maximum is 25% of the tax due.

Failure to Keep Accounts or Provide Information

Failure to keep accounts in the manner prescribed by law can result in a penalty of 15% of the tax due. In addition, requested information that is not provided to the tax authorities by the set deadline will result in a penalty of PKR 2,000 plus PKR 200 per day until provided.

Incorrect Returns

The filing of incorrect returns will result in a penalty of 100% of the correct amount of tax due.

Failure to Provide Notice of the Discontinuance of a Business

Failure to provide notice of the discontinuance of a business will result in a penalty of up to 100% of the tax due on the business in its last tax year.

Tax Evasion and Fraud

Cases of deliberate tax evasion or fraud, including failure to comply with notices, submitting false statement, concealing income, etc., will result in imprisonment of up to 3 years depending on the seriousness of the infraction.

Voluntary Declaration of Domestic Assets

Effective 1 July 2018, Pakistan has published the Voluntary Declaration of Domestic Assets Ordinance for declaration and payment of tax in respect of previous undeclared assets in Pakistan. A 2% penalty is applicable on disclosed foreign currency held in foreign currency account in Pakistan and a 5% penalty is applicable on other domestic assets.

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