What is VAT in Pakistan?

VAT stands for value added tax as is universally accepted in all tax abiding countries. This levy is indirect in nature as burden of this levy is ultimately rooted to the end consumers. The description ‘value added tax’ is taken due to the reason that every supplier and/or service provider in a supply chain is required to impose this levy on the goods he supplies or service he provides so as to collect tax at a certain proportion of value which he adds to the goods or service he supplies.

This is also referred as ‘sales tax’, ‘GST’, ‘Indirect tax’ and ‘ service tax’.