Pakistan levies Sales Tax (currently 18%), not VAT — the calculation is identical.
Invoice par price quote karte waqt ye uljhan sab ko hoti hai: ye rate tax-shuda hai ya tax ke bagher? Pakistan has no tax literally named “VAT” — but the standard sales tax (GST) under the Sales Tax Act 1990 works exactly like a value added tax, charged at 18% on most goods and many services. Our free VAT/sales tax calculator does both directions: add tax to a net price, or extract the tax hidden inside a tax-inclusive price.
The Two Calculations
- Add tax: Gross price = Net × 1.18. Net Rs 10,000 → Gross Rs 11,800, tax Rs 1,800.
- Remove/extract tax: Net = Gross ÷ 1.18. Invoice says Rs 11,800 → Net Rs 10,000, tax inside Rs 1,800.
Registered businesses charge sales tax on supplies and claim the sales tax they paid on purchases (input tax) — the tax sticks only to the final consumer, exactly like VAT systems worldwide (UK VAT 20%, EU average ~21%). That’s why accurate add/extract math matters on every quotation and invoice.
How to Use
- Enter the amount.
- Choose Add tax (for net → gross pricing) or Extract tax (invoice total → find the net + tax inside).
- Set the rate (default 18% — Pakistan’s standard; editable for reduced-rate items or other countries).
- Click Calculate — net, tax, and gross shown clearly.
Notes
- Reduced/exempt categories exist in Pakistan (certain foods, pharma, exports at 0%) — the rate field lets you set them.
- Services are taxed under provincial sales tax regimes (PRA, SRB, KPRA, BRA) at varying rates (often 13–16%) — set the rate accordingly.
- Price tags in retail usually include tax (tax-inclusive pricing rules apply to many goods) — extract mode settles disputes fast.
FAQs
What is the VAT/sales tax rate in Pakistan?
18% standard rate on goods under the Sales Tax Act 1990. Some categories are reduced or exempt; services carry provincial rates.
How do I find the tax inside an inclusive price?
Divide by 1.18 to get the net, then subtract: tax = gross − net. Rs 23,600 gross → net Rs 20,000, tax Rs 3,600.
Who actually pays the sales tax?
The final consumer. Registered businesses collect it on sales and claim credit for tax on their purchases, remitting only the difference to FBR.
What is input tax and output tax?
Output tax = tax you charge on sales. Input tax = tax you paid on purchases. Your FBR return pays output − input.
Do freelancers/exporters charge sales tax?
Exports are generally zero-rated. Export services/IT remittances have their own withholding regimes — see our Payoneer fee calculator for the freelancer side.
Related: income tax calculator | WeBOC duty calculator | Finance calculators