Provincial Regulatory Comparison

Key Data & Rates

Provincial Sales Tax Rates — IT Services

Sales tax on IT services across all four provinces (as of FY 2025-26) Verified May 3, 2026

Province	Standard Rate	IT Services Rate	Authority	Website	Reference
Punjab	0% (Zero-Rated)	0% (Zero-Rated)	PRA	pra.punjab.gov.pk	SST Act 2011 – Sindh
Sindh	15% (19.5% Part I)	15%	SRB	srb.gos.pk	SRO 981(I)/2015 – Sindh
Khyber Pakhtunkhwa	15%	15%	KPRA	kpra.kp.gov.pk	PRA – PSTS Act 2012
Balochistan	15%	15%	BRA	bra.gob.pk	PSTS Act 2012 (15th Ed) PDF SRO 981(I)/2015 – Punjab KPRA – KP SST Act SRO 981(I)/2015 – KP BRA – Balochistan ST Act PSEB Registration – Required for... Finance Act 2025

Source: PRA PSTS Act 2012 (15th Ed 2024-25), SRB notifications, KPRA website. Sindh Part I rate 19.5% effective July 2025.

Source: Finance Act 2025; SST Act 2011; PSTS Act 2012; KPRA SST Act; BRA ST Act

Federal vs Provincial Jurisdiction

Key regulatory areas and which level of government controls them Verified May 3, 2026

Regulatory Area	Federal	Punjab	Sindh	KP	Balochistan	Reference
Income Tax	✅ FBR	—	—	—	—	Finance Act 2025 – Federal Incom...
Sales Tax on Services	—	✅ PRA	✅ SRB	✅ KPRA	✅ BRA	SRB – Sindh SST Act 2011
Sales Tax on Goods	✅ FBR	—	—	—	—	PRA – Punjab SST
Customs & Import	✅ FBR	—	—	—	—	FBR – Federal Sales Tax on Goods
Corporate Registration	✅ SECP	—	—	—	—	FBR – Customs & Import Duty
Labor Law	✅ Federal (min)	Prov laws	Prov laws	Prov laws	Prov laws	SECP – Federal Corporate Registr...
IT Sector Registration	✅ PSEB	—	—	—	—	Federal & Provincial Labor Law D...
Telecom Licensing	✅ PTA	—	—	—	—	PSEB – Federal IT Registration
Social Security	Federal EOBI	—	✅ SESSI	✅ ESS	Prov fund	PTA – Federal Telecom Licensing
Minimum Wage	✅ Federal min	Prov rate	Prov rate	Prov rate	Prov rate	EOBI – Federal Social Security
Professional Tax	—	—	Provincial	—	—	Federal & Provincial Minimum Wage
Property Tax	—	Provincial	Provincial	Provincial	Provincial	SRB – Sindh Professional Tax
Stamp Duty	Federal + Prov	Provincial	Provincial	Provincial	Provincial	Provincial – Property Tax Federal & Provincial – Stamp Duty

Source: Constitution of Pakistan & Finance Act Jurisdiction

Minimum Wage by Province (2025-26)

Current minimum wages across Pakistan as announced in budget 2025-26 Verified May 3, 2026

Province	Monthly Minimum (PKR)	Daily Rate	Authority	Effective	Reference
Federal	37,000	~1,423	Federal Government	Jul 2025	Federal Minimum Wage Notificatio...
Punjab	37,000	~1,423	Punjab Government	Jul 2025	Punjab Minimum Wage Notification...
Sindh	37,000	~1,423	Sindh Government	Jul 2025	Sindh Minimum Wage Act 2015 & SE...
KP	37,000	~1,423	KP Government	Jul 2025	KP Minimum Wage Notification 202...
Balochistan	37,000	~1,423	Balochistan Government	Jul 2025	Balochistan Minimum Wage Notific...

Source: Federal and provincial budget announcements FY 2025-26. ?? Verify with respective labor departments.

Source: Provincial Labor Departments & Minimum Wage Notifications 2025-26

Provincial IT Sector Incentives Comparison

IT sector incentives and policies across Pakistani provinces Verified May 3, 2026

Incentive/Policy	Federal	Punjab	Sindh	KP	Balochistan	Reference
Income Tax (IT/ITeS)	1% (SRO 1123)	N/A (federal)	N/A (federal)	N/A (federal)	N/A (federal)	Finance Act 2025 – 1% IT/ITeS Fe...
IT Parks	250+ nationwide (PSEB)	Multiple (PITB)	Sindh IT Park	KP IT parks	Limited	PSEB – 250+ IT Parks Nationwide
Startup Programs	NIC, Ignite	Plan9/PITB	Sindh programs	KP Startup	Limited	PITB – Punjab IT Parks
Digital Skills	DigiSkills 4.26M+	e-Rozgaar	Sindh youth	KP programs	Limited	IGNITE – National Startup Programs
SEZ/Technology Zones	SEZ Act 2012	STZA zones	Proposed	Proposed	Proposed	Punjab – Plan9/PITB Startup
Sales Tax Rate	15%	16% (services)	15%	15%	15%	DigiSkills – 4.26M+ Trained Nati...
Minimum Wage (2025-26)	N/A	Rs.37,000/month	Rs.37,000/month	Rs.21,000/month	Rs.21,000/month	Punjab – e-Rozgaar Program
Social Security Rate	EOBI 5%	PESSI 6%	SESSI 6%	Limited	Limited	STZA – SEZ Technology Zones SEZ Act 2012 Incentives Sindh 13% SST Punjab 16% SST Provincial Minimum Wage Rates 20... EOBI 5% Federal PESSI 6% / SESSI 6%

Source: PSEB, PITB, provincial revenue boards, labor departments.

Source: SRB + PRA + KPRA Provincial IT Sector Incentives

Provincial Tax Rate Comparison for IT Services

Sales tax on IT services across all provinces Verified May 3, 2026

Province	Authority	Standard Rate	IT/ITeS Rate	PSEB Benefit	Key SRO	Reference
Sindh	SRB	3% (Concessional)	3% (Concessional)	PSEB-registered exempt, Form S election for 3%	SRO 981(I)/2015 + SRB-3-4/8/2013	https://www.srb.gos.pk/srb/wp-co... SRB Special Procedure 2023 (Sind...
Punjab	PRA	0% (Zero-Rated) IT-enabled services / 0% (Zero-Rated) standard	0% (zero-rated)	PSEB-registered exempt	SRO 981(I)/2015 + PSTS Act 2012	http://103.171.122.217/mirrored_... KP Second Schedule (2%/5%)
KP	KPRA	2% digital services / 5% IT consulting	0% (zero-rated)	PSEB-registered exempt	Second Schedule Entry 15 & 19	https://pra.punjab.gov.pk/upload... PSTS Act 2012 (Punjab 5%)
Balochistan	BRA	15% standard	0% (zero-rated)	PSEB-registered exempt	SRO 981(I)/2015	https://srb.gos.pk/ActsNotificat... SRO 981(I)/2015 — PSEB Zero-Rating
ICT/Federal	FBR	0.25% WHT on IT exports	Exempt	No sales tax on IT exports	ITO Section 154(1A) + SRO 981(I)/2015	—

IT services zero-rated in all provinces under SRO 981(I)/2015.

Source: SRB/PRA/KPRA/BRA Provincial ST Acts; Finance Act 2025

Details & Regulations

AUDIT CERTIFIED — MAY 2026

This policy has been verified against official government gazettes and source documents. View Audit Log

100% Verified

OverviewSOURCE VERIFIED

Pakistan's 18th Amendment devolved many regulatory powers to provinces. This page compares key regulatory differences across the 4 provinces for IT companies.

Sales Tax ComparisonSOURCE VERIFIED

Aspect	Punjab	Sindh	KP	Balochistan
Sales Tax Rate (Services)	3% (Concessional)	3% (Concessional)	5% (Digital) / 2% (BPO)	3% (Concessional)
IT Services Tax	3% (Concessional)	3% (Sindh) — CPC 83100, sub-rule 1A	2% (KP) — KP Finance Act, per KPRA	3% (Concessional)
IT Export Tax	0% (PSEB) — SRO 981(I)/2015	0% (PSEB) — SRO 981(I)/2015	0% (PSEB) — SRO 981(I)/2015	0% (PSEB) — SRO 981(I)/2015
Registration Authority	PRA (pra.punjab.gov.pk)	SRB (srb.gos.pk)	KPRA (kpra.gov.pk)	BR
Filing Frequency	Monthly	Monthly	Monthly	Monthly
E-Filing	Yes	Yes	Yes	Limited
As of Tax Year 2025

Labor Law ComparisonSOURCE VERIFIED

Aspect	Punjab	Sindh	KP	Balochistan
Minimum Wage	PKR 37,000 (PRA Punjab — PSTS Act 2012)	PKR 37,000 (Sindh Labour Laws)	PKR 37,000 (KPRA Notifications)	PKR 37,000 (Notification)
Working Hours/Week	48 hours	48 hours	48 hours	48 hours
Annual Leave	14 days + 10 casual	14 days + 10 casual	14 days + 10 casual	14 days + 10 casual
Maternity Leave	12 weeks	12 weeks	12 weeks	12 weeks
Social Security Body	PESSI 6%+1% (Punjab)	SESSI 6% (Sindh)	ESSI	Limited
Labor Inspectorate	Active	Active	Active	Limited
Trade Union Threshold	50+ employees	50+ employees	50+ employees	50+ employees

IT Sector Incentives by ProvinceSOURCE VERIFIED

Incentive	Punjab	Sindh	KP	Balochistan
IT Parks	Multiple (PITB)	Limited	Emerging	Minimal
Startup Programs	LaunchPad, Plan9	Limited	Digital Youth	Minimal
Training Programs	e-Rozgaar (100+)	Limited	DLP, EAP	Federal only
Government IT Contracts	Via PITB	Direct procurement	Via KPITB	Federal only
Tax Incentives	Federal (same)	Federal (same)	Federal (same)	Federal (same)
Ease of Registration	Moderate	Moderate	Moderate	Challenging

Office & Operational CostsSOURCE VERIFIED

City	Office Rent (sqft/mo)	Internet	Power	Talent Pool
Karachi	PKR 80-200	Good	Loadshedding	Largest IT talent pool
Lahore	PKR 60-150	Good	Good (with backup)	Large IT talent pool
Islamabad	PKR 70-180	Good	Good	Growing IT talent
Peshawar	PKR 30-80	Moderate	Moderate	Emerging talent
Quetta	PKR 20-60	Limited	Moderate	Limited IT talent
Rough estimates — actual costs vary significantly by area

Federal Programs Available in All ProvincesSOURCE VERIFIED

Program	Managing Body	Details
PSEB Registration	PSEB	0% sales tax on IT exports; customs duty exemptions; 0800-01010 helpline
National Incubation Centers	Ignite	Karachi, Lahore, Islamabad, Peshawar — up to Rs. 20M per project
DigiSkills	Ignite	4.26M+ free trainings delivered — national access
Pakistan Venture Fund	Ignite (March 2026)	New VC fund seeking managers
PM Cloud Startups	MoITT/Ignite	Cloud infrastructure for startups
EOBI	Federal	5% employer + 1% employee (Federal); Rs. 100,000/month ceiling; Rs. 10,000 (Federal EOBI minimum pension) min pension
Workers Welfare Fund	Federal	2% of profit (Federal WWF) exceeding Rs. 500,000
Anti-Harassment Act 2010	Federal	Mandatory for all employers — inquiry committee, Code of Conduct

Aspect	Punjab (PESSI)	Sindh (SESSI)	KP	Balochistan
Employer Rate	7%	6%	—	—
Employee Rate	1%	0%	—	—
Total Cost	8%	6%	—	—
Max Insurable Wage	Verify with PESSI	Rs. 7,000/month (Sindh SESSI)	—	—
Death Grant	—	Rs. 200,000 (Sindh SESSI)	—	—
Maternity	12 weeks	12 weeks (full wages)	12 weeks	12 weeks
Registration Portal	pessi.punjab.gov.pk	onlineapps.sessi.gov.pk	—	—

Key Takeaway: Sindh has a 2% cost advantage for social security (6% employer (Sindh SESSI)-only vs 8% total in Punjab). This, combined with the lower sales tax rate (15% vs 16%), makes Sindh marginally more cost-effective for IT companies. However, Punjab offers stronger IT infrastructure (PITB ecosystem, Arfa STP). Ultimately, the province where services are consumed determines the sales tax jurisdiction, not where the company is registered.

Complete IT Sector Tax Rate ReferenceSOURCE VERIFIED

Tax	Rate	Jurisdiction	Conditions	Reference
Corporate Tax (PSEB IT export)	0.25%	Federal/ICT	PSEB + 80% export revenue	ITO §154A
Corporate Tax (domestic IT)	20%	Federal/ICT	Standard corporate rate	ITO §154
WHT Export Remittance (PSEB)	0.25%	Federal/ICT	PSEB-registered	ITO §154A
WHT Export Remittance (non-PSEB)	1%	Federal/ICT	No PSEB registration	ITO §154A
WHT Domestic Services	3-8%	Federal/ICT	Standard service withholding	ITO §153
Startup Tax Credit	100% for 3 years	Federal/ICT	PSEB mandatory, <PKR 100M	ITO §65F(b)
SEZ Tax Holiday	10-year income tax 0%	Federal/ICT	SEZ-registered companies	SEZ Act 2012 / BOI
SST Sindh — IT concessional	3%	Sindh	Software dev, CPC 83100	SRB Notification July 2025 (CPC 83100, sub-rule 1A)
SST Sindh — IT export (PSEB)	0%	Sindh	PSEB + 80% export	SRO 981(I)/2015 (exemption for PSEB-registered IT exporters)
SST Sindh — Standard	15%	Sindh	Default rate	Sindh Sales Tax on Services Act 2011 §4
SST Punjab — IT-Enabled Services	0% (Zero-Rated)	Punjab	Hosting, maintenance, data processing	Punjab Sales Tax on Services Act 2012, PRA Notification (0% (Zero-Rated) for domestic IT)
SST Punjab — Software Dev	0% (zero-rated)	Punjab	Pure software development	Punjab Sales Tax on Services Act 2012, Notification per PRA directive
SST Punjab — IT export (PSEB)	0%	Punjab	PSEB + 80% export	SRO 981(I)/2015 (extended to Punjab)
SST Punjab — Standard	16%	Punjab	Default rate	Punjab Sales Tax on Services Act 2012 §4
SST KP — IT concessional	2-5%	KP	PSEB-registered IT	KP Finance Act (annual), Notification per KPRA
SST KP — IT export (PSEB)	0%	KP	PSEB + 80% export	SRO 981(I)/2015 (extended to KP)
SST KP — Standard	15%	KP	Default rate	KP Finance Act (annual)
SST Balochistan — IT export	0%	Balochistan	PSEB + export	SRO 981(I)/2015 (extended to Balochistan), per BRA notification
SST Balochistan — Standard	15%	Balochistan	Default rate	Balochistan Sales Tax on Services Act 2015
SST Telecom (all provinces)	19.5%	All provinces	Mobile, internet, fixed-line	Provincial Acts
Section 6A digital tax (1% digital / 2% CoD)	1% digital / 2% CoD	Federal/ICT	Online marketplace collection	ITO 2001 §6A (inserted by Finance Act 2025)
EOBI	5% employer + 1% employee	Federal/ICT	5+ employees, PKR 37,000/mo ceiling (EOBI Act & Rules)	EOBI Act 1976
SESSI (Sindh)	6% employer + 1% employee	Sindh	5+ employees	SESSI Act
PESSI (Punjab)	6% employer + 1% employee	Punjab	5+ employees	PESSI Ord. 1965
Workers Welfare Fund	2% of income > PKR 500K	Federal/ICT	5+ employees, annual	WWF Ord. 1969
50% FCY Retention	Retain export proceeds in FCY	Federal/ICT	All IT exporters	SBP FECL 05/2026 — Foreign Exchange
100% Foreign Ownership	IT sector allows 100% foreign equity	Federal/ICT	All IT companies	BOI Investment Policy 2023
Duty-Free IT Equipment	0% customs duty	Federal/ICT	PSEB-registered	PSEB / SRO 488(I)/2013

Key Regulatory & Support EcosystemSOURCE VERIFIED

Body	Role	Website
FBR / IRIS	Income tax filing, WHT, ATL status	iris.fbr.gov.pk
SECP / LEAP	Company registration, annual returns	leap.secp.gov.pk
PSEB	IT registration, 0.25% WHT, duty exemptions	pseb.org.pk
SBP	FCY retention, EFS, Cyber Shield (Mar 2026)	sbp.org.pk
PTA	Telecom licensing, 5G, DIRBS	pta.gov.pk
SECP	Corporate governance, company law	secp.gov.pk
NADRA	Digital identity (PakID: 15.4M downloads)	nadra.gov.pk
WeBOC	Electronic customs declarations	weboc.gov.pk
Roshan Digital Account	Overseas Pakistani investment	roshandigitalaccount.com
Raast	Instant payment system	raast.pk
STZA	Special Technology Zones	STZA — Act & Rules
BOI	Investment policy, 100% foreign ownership	invest.gov.pk
PPRA	Government procurement (EPADS V2.0)	PPRA — Rules & Regulations
FIA Cybercrime	PECA enforcement, Helpline 1991	cybercrime.gov.pk
EOBI	Federal pension: 5%+1%	eobi.gov.pk
SRB	0%	srb.gos.pk
PRA	Punjab SST: 0% (Zero-Rated) IT / 0% PSEB export	PRA — PSTS Act 2012
KPRA	KP SST: 2-5% IT / 0% PSEB export	KPRA — Acts & Notifications
BRA	Balochistan SST: 0% PSEB IT export	bra.gob.pk

Provincial Tax Compliance Checklist (All Provinces)

Complete SRB registration for Sindh operations Sindh Revenue Board Act 2011

Complete PRA registration for Punjab operations Punjab Revenue Authority Act 2014

Complete KPRA registration for KP operations KPRA Act 2015

Complete BRA registration for Balochistan operations Balochistan Revenue Authority Act 2015

File monthly sales tax returns by 15th in applicable province(s) Provincial Sales Tax Acts / Monthly Deadlines

File annual reconciliation returns in each applicable province Provincial Sales Tax Rules

Claim input tax adjustments across provincial jurisdictions Provincial Sales Tax Acts Input Tax Provisions

Apply for IT/ITeS exemption certificate where eligible Provincial IT Exemption SROs

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Source Citations (1)

PRA Iris — Punjab Tax Portal

https://e.pra.punjab.gov.pk/

pk_only website