Tax Rates for Companies

Division II, Part I, 1st Schedule

Serial No	Type	Rate of Tax
01	Banking Companies	35%
02	Public / Private Companies	29%
03	Small Companies	23%
04	Alternate Corporate Tax (ACT) u/Sec. 113C	17% of accounting profit

Table: Tax Rates for Companies | Where the taxpayer is a small company as defined in Section 2 of the Income Tax Ordinance, 2001, tax shall be payable at the rate of 24%

Super Tax

Division II, Part I, 1st Schedule

Serial No	Type	Rate of Tax
01	Banking Company	4%
02	Other than a Banking Company, having income equal to or exceeding Rs.500 million	2%

Table: Super Tax

Gradual Reduction in Corporate Tax Rates

Serial No	Tax Year	Rate of Tax
01	2019	24%
02	2020	23%
03	2021	22%
04	2022	21%
05	2023 and onwards	20%

Table: Gradual Reduction in Corporate Tax Rates

Dividend Tax

Division III, Part I, 1st Schedule

Serial No	Description	Rate of Tax
01	In case of dividend paid by Independent Power Purchaser where such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be reimbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entity.	7.5%
02	In cases other than mentioned in 01 and 03.	15%
03	In case of dividend received by a person from a mutual fund.	25%

Table: Dividend Tax | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List.

Tax for Profit on Debt – Other than a Compaany (Sec. 7B)

Division III A, Part I, 1st Schedule

Serial No	Profit on Debt	Rate of Tax
01	Where profit on debt does not exceed Rs.5,000,000	15%
02	Where profit on debt exceeds Rs.5,000,000 but does not exceed Rs.25,000,000	17.5% of the amount exceeding Rs.5,000,000
03	Where profit on debt exceeds Rs.25,000,000 but does not exceed Rs.36,000,000	20% of the amount exceeding Rs.25,000,000

Table: Tax for Profit on Debt | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List.

Profit on Debt exceeding Rs.36 million shall be subject to tax under normal law.

Tax on Shipping or Air Transport Income of a Non-Resident Person

Serial No	Description	Rate of Tax
01	In the case of shipping income	8% of the gross amount received or receivable
02	In the case of air transport income	3% of the gross amount received or receivable

Table: Tax on Shipping or Air Transport Income of a Non-Resident Person

Tax on Return on Investment (Sec. 5AA)

Division III B, Part I, 1st Schedule

Serial No	Sukuk-holder	Rate of Tax
01	Company	25%
02	Individual and AOP, if the return on investment is more than Rs.1,000,000	12.5%
03	Individual and AOP, if the return on investment is less than Rs.1,000,000	10%

Table: Tax on Return on Investment | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List

Tax on Certain Payments to Non-Residents

Serial No	Category	Rate of Tax
01	Royalty (Sec. 6)	15% of the gross amount
02	Fee for Technical Services (Sec. 6)	15% of the gross amount
03	Offshore digital services (Sec. 6)	5% of the gross amount
04	Shipping income (Sec. 7)	8% of the gross amount received or receivables
05	Air transport income (Sec. 7)	3% of the gross amount received or receivables

Table: Tax on Certain Payments to Non-Residents | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List

Tax on Income from Property for Individuals and Association of Persons (Sec. 15)

Division V, Part I, 1st Schedule

Serial No	Gross Amount of Rent	Rate of Tax
01	Where the gross amount of rent does not exceed Rs.200,000	Nil
02	Where the gross amount of rent exceeds Rs.200,000 but does not exceed Rs.600,000	5% of the gross amount exceeding Rs.200,000
03	Where the gross amount of rent exceeds Rs.600,000 but does not exceed Rs.1,000,000	Rs.20,000 + 10% of the gross amount exceeding Rs.600,000
04	Where the gross amount of rent exceeds Rs.1,000,000 but does not exceed Rs.2,000,000	Rs.60,000 + 15% of the gross amount exceeding Rs.1,000,000
05	Where the gross amount of rent exceeds Rs.2,000,000 but does not exceed Rs.4,000,000	Rs.210,000 + 20% of the gross amount exceeding Rs.2,000,000
06	Where the gross amount of rent exceeds Rs.4,000,000 but does not exceed Rs.6,000,000	Rs.610,000 + 25% of the gross amount exceeding Rs.4,000,000
07	Where the gross amount of rent exceeds Rs.6,000,000 but does not exceed Rs.8,000,000	Rs.1,110,000 + 30% of the gross amount exceeding Rs.6,000,000
08	Where the gross amount of rent exceeds Rs.8,000,000	Rs.1,710,000 + 35% of the gross amount exceeding Rs.8,000,000

Table: Tax on Income from Property

Capital Gains on Disposal of Securities

Division VII, Part I, 1st Schedule

Serial No	Period	Tax Year 2015	Tax Year 2016	Tax Year 2017	Tax Years 2018 to 2020
					Securities acquired prior 01.07.2016	Securities acquired after 01.07.2016
01	Where holding period of a security is less than twelve months	12.5%	15%	15%	15%	15%
02	Where holding period of a security is twelve months or more but less than twenty-four months	10%	12.5%	12.5%	12.5%	15%
03	Where holding period of a security is twenty-four months or more but the security was acquired on or after 1st July, 2013	0%	7.5%	7.5%	7.5%	15%
04	Where the security was acquired before 1st July, 2013	0%	0%	0%	0%	0%
05	Future commodity contracts entered into by the members of Pakistan Mercantile Exchange	0%	0%	5%	5%	5%

Table: Capital Gains on Disposal of Securities | As per 10th Schedule, Tax Rate shall be increased by 100% in case the person is not appearing in Active Taxpayers’ List

A Mutual Fund or a Collective Investment Scheme or a REIT Scheme shall deduct Capital Gains Tax at the rates as specified below on Redemtion of Securities, as specified below:

Serial No	Category	Rate of Tax
01	Individual and Association of Persons	10% for stock funds	10% for other funds
02	Company	10% for stock funds	25% for other funds

Provided further that in case of a stock fund if dividend receipts of the fund are less than capital gains, then the rate of tax deduction shall be 12.5%. No capital gains tax shall be deducted, if the holding period of the security is more than 4 years.

Capital Gains on Disposal of Immovable Property (Sec. 37(1A))

Division VIII, Part I, 1st Schedule

Serial No	Period	Rate of Tax
01	Where the gain does not exceed Rs.5 million	5%
02	Where the gain exceeds Rs.5 million but does not exceed Rs.10 million	10%
03	Where the gain exceeds Rs.10 million but does not exceed Rs.15 million	15%
04	Where the gain exceeds Rs.15 million	20%

Table: Capital Gains on Disposal of Immovable Property

Capital Gains on Disposal of Immovable Property being an Open Plot (Sec. 37(3A))

Serial No	Holding Period	Rate of Tax
01	Where the holding period of open plot does not exceed one year	100%
02	Where the holding period of open plot exceeds one year but does not exceed eight years	75%
03	Where the holding period of open plot exceeds eight years	0%

Table: Capital Gains on Disposal of Immovable Property being an Open Plot

Capital Gains on Disposal of Immovable Property being a Constructed Property (Sec. 37(3B))

Serial No	Holding Period	Rate of Tax
01	Where the holding period of constructed property does not exceed one year	100%
02	Where the holding period of constructed property exceeds one year but does not exceed four years	75%
03	Where the holding period of constructed property exceeds four years	0%

Table: Capital Gains on Disposal of Immovable Property being a Constructed Property

Tax on Builders (Sec. 7C)

Division VIII A, Part I, 1st Schedule

Karachi, Lahore and Islamabad		Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbottabad and Quetta		Urban Areas not specified in A and B
For Commercial Buildings
Rs.210 / Sq Ft		Rs.210 / Sq Ft		Rs.210 / Sq Ft
For Residential Buildings
Area Sq. ft	Rate Sq. ft	Area Sq. ft	Rate Sq. ft	Area Sq. ft	Rate Sq. ft
Up to 750	Rs.20	Up to 750	Rs.15	Up to 750	Rs.10
751 to 1500	Rs.40	751 to 1500	Rs.35	751 to 1500	Rs.25
1501 and more	Rs.70	1501 and more	Rs.55	1501 and more	Rs.35

Table: Tax on Builders

Tax on Developers (Sec. 7D)

Division VIII B, Part I, 1st Schedule

Karachi, Lahore and Islamabad		Hyderabad, Sukkur, Multan, Faisalabad, Rawalpindi, Gujranwala, Sahiwal, Peshawar, Mardan, Abbottabad and Quetta		Urban Areas not specified in A and B
For Commercial Plots
Rs.210 / Sq Yd		Rs.210 / Sq Yd		Rs.210 / Sq Yd
For Residential Plots
Area Sq. Yd	Rate Sq. Yd	Area Sq. Yd	Rate Sq. Yd	Area Sq. Yd	Rate Sq. Yd
Up to 120	Rs.20	Up to 120	Rs.15	Up to 120	Rs.10
121 to 200	Rs.40	121 to 200	Rs.35	121 to 200	Rs.25
201 and more	Rs.70	201 and more	Rs.55	201 and more	Rs.35

Table: Tax on Developers

Minimum Tax (Sec. 113)

Division IX, Part I, 1st Schedule

Serial No	Person(s)	Minimum Tax as percentage of the person’s turnover for the year
01	Oil marketing companies, Oil refineries, Sui Southern Gas Company Limited and Sui Northern Gas Pipeline Limited (for the cases where annual turnover exceeds rupees one billion); Pakistani Airlines; Poultry industry including poultry breeding, broiler production, egg production and poultry feed production; Dealers or distributors of fertilizers; and Person running an online marketplace as defined in clause (38B) of Section 2.	0.75%
02	Distributors of pharmaceutical products, fast moving consumer goods and cigarettes; Petroleum agents and distributors who are registered under the Sales Tax Act, 1990; Rice mills and dealers; and Flour mills	0.25%
03	Motorcycle dealers registered under the Sales Tax Act, 1990	0.30%
04	In all cases (other than 1 to 3 and 5)	1.5%
05	Clause (24D) of Part II of the Second Schedule Dealers and sub-dealers of sugar, cement and edible oil subject to the condition that the names are appearing on the ATL issued under the Sales Tax Act, 1990 and the Income Tax Ordinance, 2001	0.25%

Table: Minimum Tax

Reduction in Tax Liability for Full Time Teacher

Clause (2), Part III of 2nd Schedule

The tax payable by a fulltime teacher or a researcher, employed in a non-profit education or research institution duly recognised by HEC, a Board of Education or a University recognised by HEC including government research institution shall be reduced by an amount equal to 25% of the tax payable on his income from salary. Provided that this clause shall not apply to teachers of medical profession who derive income from private medical practice or who receive share of consideration received from patients.

Table: Reduction in Tax Liability for Full Time Teacher

Payment of Advance Tax

Sec. 147

Installment	Quarter	Due Dates
		Individuals	AOPs / Companies
01	September	15th September	25th September
02	December	15th December	25th December
03	March	15th March	25th March
04	June	15th June	25th June

Table: Payment of Advance Tax

Advance Tax

Serial No	Person(s)	Rate of Tax
01	Industrial undertaking importing re-meltable steel (PCT Heading 72.04) and directly reduced iron for its own use; Persons importing potassic fertilizers in pursuance of Economic Coordination Committee of the cabinet’s decision No. ECC-155/12/2004 dated the 9th December, 2004; Persons importing urea; Manufacturers covered under Notification No. S.R.O. 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O. 1125(I)/2011 dated the 31st December, 2011 Persons importing Gold; Persons importing Cotton; and Persons importing LNG	1% of the import value as increased by customs-duty, sales tax and federal excise duty
02	Persons importing pulses	2% of the import value as increased by customs-duty, sales tax and federal excise duty
03	Commercial importers covered under Notification No. S.R.O. 1125(I)/2011 dated the 31st December, 2011 and importing items covered under S.R.O 1125(I)/2011 dated the 31st December, 2011.	3% of the import value as increased by customs-duty, sales tax and federal excise duty
04	Persons importing coal	4%
05	Persons importing finished pharmaceutical products that are not manufactured otherwise in Pakistan, as certified by the Drug Regulatory Authority of Pakistan	4%
06	Ship breakers on import of ships	4.5%
07	Industrial undertakings not covered under S. Nos 01 to 06	5.5%
08	Companies not covered under S. Nos. 01 to 07	5.5%
09	Persons not covered under S. Nos. 01 to 08	6%

Table: Advance Tax

Advance Tax on Dividend

Serial No	Description	Rate of Tax
01	In case of dividends paid by Independent Power Purchasers where such dividend is a pass through item under an Implementation Agreement or Power Purchase Agreement or Energy Purchase Agreement and is required to be re-imbursed by Central Power Purchasing Agency (CPPA-G) or its predecessor or successor entoty.	7.5%
02	Other than mentioned above	15%

Table: Advance Tax on Dividend

Tax on Brokerage and Commission

Serial No	Person(s)	Rate of tax
01	Advertising Agents	10%
02	Life Insurance Agents where commission received is less than Rs. 0.5 million per annum	8%
03	Persons not covered in 1 and 2 above	12%

Table: Tax on Brokerage and Commission

Collection of Tax by a Registered Stock Exchange in Pakistan

Serial No	Description	Rate of Tax
01	In case of purchase of shares as per clause (a) of sub-section (1) of Section 233A.	0.02% of purchase value
02	In case of purchase of shares as per clause (b) of sub-section (1) of Section 233A.	0.02% of sale value

Table: Collection of Tax by a Stock Exchange in Pakistan

Collection of Tax on Passenger Transport Vehicles

Serial No	Capacity	Rate per seat per annum
01	Four or more persons but less than ten persons.	Rs.50
02	Ten or more persons but less than twenty persons.	Rs.100
03	Twenty persons or more.	Rs.300

Table: Collection of Tax on Passenger Transport Vehicles

Yearly Collection of Tax on Private Motor Vehicles

Serial No	Engine Capacity	Rate of Tax
01	Up to 1000cc	Rs.800
02	1001cc to 1199cc	Rs.1,500
03	1200cc to 1299cc	Rs.1,750
04	1300cc to 1499cc	Rs.2,500
05	1500cc to 1599cc	Rs.3,750
06	1600cc to 1999cc	Rs.4,500
07	2000cc and above	Rs.10,000

Table: Yearly Collection of Tax on Private Motor Vehicles

Lump sum Collection of Tax on Private Motor Vehicles

Serial No	Engine Capacity	Rate of Tax
01	Up to 1000cc	Rs.10,000
02	1001cc to 1199cc	Rs.1,8000
03	1200cc to 1299cc	Rs.20,000
04	1300cc to 1499cc	Rs.30,000
05	1500cc to 1599cc	Rs.45,000
06	1600cc to 1999cc	Rs.60,000
07	2000cc and above	Rs.120,000

Table: Lump sum Collection of Tax on Private Motor Vehicles

Collection of Tax on Electricity Consumption

Serial No	Electricity Bill	Amount in Rs.
01	Does not exceed Rs.400	0
02	Exceeds Rs.400 but does not exceed Rs.600	80
03	Exceeds Rs.600 but does not exceed Rs.800	100
04	Exceeds Rs.800 but does not exceed Rs.1,000	160
05	Exceeds Rs.1,000 but does not exceed Rs.1,500	300
06	Exceeds Rs.1,500 but does not exceed Rs.3,000	350
07	Exceeds Rs.3,000 but does not exceed Rs.4,500	450
08	Exceeds Rs.4,500 but does not exceed Rs.6,000	500
09	Exceeds Rs.6,000 but does not exceed Rs.10,000	650
10	Exceeds Rs.10,000 but does not exceed Rs.15,000	1,000
11	Exceeds Rs.15,000 but does not exceed Rs.20,000	1,500
12	Exceeds Rs.20,000	At the rate of 12% for commercial consumers; and At the rate of 5% for industrial consumers.

Table: Collection of Tax on Electricity Consumption

Advance Tax on Domestic Electricity Consumption

Serial No	Description	Rate of Tax
01	If the amount of monthly bill is Rs.75,000 or more	7.5%
02	If the amount of bill is less than Rs.75,000	0%

Table: Advance Tax on Domestic Electricity Consumption

Collection of Tax on Telephone Users

Serial No	Description	Rate of Tax
01	In the case of a telephone subscriber (other than mobile phone subscriber) where the amount of monthly bill exceeds Rs.1,000	10% of the exceeding amount of bill
02	In the case of subscriber of internet, mobile telephones and pre-paid internet or telephone card	12.5% of the amount of bill or sales price of internet pre-paid card or prepaid telephone card or sale of units through any electronic medium or whatever form.

Table: Collection of Tax on Telephone Users

Tax on Cash Withdrawal from a Bank

Serial No	Description	Rate of Tax
01	Cash amount withdrawn, for the person whose name is not appearing in the active taxpayer’s list.	0.6% of the amount withdrawn

Table: Tax on Cash Withdrawal from a Bank

Advance Tax on Transactions in Bank [Transferor]

Serial No	Description	Rate of Tax
01	The rate of tax to be deducted under Sec. 231AA for the person whose name is not appearing in the active taxpayers’ list.	0.6% of the transaction

Table: Advance Tax on Transactions in Bank

Advance Tax on Banking Transactions Otherwise Than Through Cash [Receiver]

Serial No	Description	Rate of Tax
01	Banking Transaction (other than cash) at the time of sale of instrument, including demand draft, pay order, special deposit receipt, transfer of any sum through cheque, online transfer, ATM transfers or any other mode of electronic or paper based transfers.	0.4% of the transaction amount

Table: Advance Tax on Banking Transactions Otherwise Than Through Cash

Advance Tax on Purchase, Registration and Transfer of Motor Vehicles

Serial No	Engine Capacity	Rate of Tax
01	Up to 850cc	Rs.7,500
02	851cc to 1000cc	Rs.1,5000
03	1001cc to 1300cc	Rs.25,000
04	1301cc to 1600cc	Rs.50,000
05	1601cc to 1800cc	Rs.75,000
06	1801cc to 2000cc	Rs.100,000
07	2001cc to 2500cc	Rs.150,000
08	2501cc to 3000cc	Rs.200,000
09	Above 3000cc	Rs.250,000

Table: Advance Tax on Purchase, Registration and Transfer of Motor Vehicles

Advance Tax on Transfer of Registration or Ownership of Motor Vehicles

Serial No	Engine Capacity	Rate of Tax
01	Up to 850cc	__
02	851cc to 1000cc	Rs.5,000
03	1001cc to 1300cc	Rs.7,500
04	1301cc to 1600cc	Rs.12,500
05	1601cc to 1800cc	Rs.18,750
06	1801cc to 2000cc	Rs.25,000
07	2001cc to 2500cc	Rs.37,500
08	2501cc to 3000cc	Rs.50,000
09	Above 3000cc	Rs.62,500

Table: Advance Tax on Transfer of Registration or Ownership of Motor Vehicles

Tax on Cable Television Operator

License Category as provided in PEMRA Rules	Tax on License Fee	Tax on Renewal
H	Rs.7,500	Rs.10,000
H-1	Rs.10,000	Rs.15,000
H-2	Rs.25,000	Rs.30,000
R	Rs.5,000	Rs.12,000
B	Rs.5,000	Rs.40,000
B-1	Rs.30,000	Rs.35,000
B-2	Rs.40,000	Rs.45,000
B-3	Rs.50,000	Rs.75,000
B-4	Rs.75,000	Rs.100,000
B-5	Rs.87,500	Rs.150,000
B-6	Rs.175,000	Rs.200,000
B-7	Rs.262,500	Rs.300,000
B-8	Rs.437,500	Rs.500,000
B-9	Rs.700,000	Rs.800,000
B-10	Rs.875,500	Rs.900,000

Table: Tax on Cable Television Operator

Advance Tax on Sale to Distributors, Dealers or Wholesalers

Serial No	Category of Sales	Rate of Tax
01	Fertilizers	0.7%
02	Other than Fertilizers	0.1%

Table: Advance Tax on Sale to Distributors, Dealers or Wholesalers

Advance Tax on Dealers, Commission Agents and Arhatis, etc.

Serial No	Group	Amount of Tax
01	Group or Class A	Rs.100,000
02	Group or Class B	Rs.7,5000
03	Group or Class C	Rs.5,0000
04	Any Other Category	Rs.5,0000

Table: Advance Tax on Dealers, Commission Agents and Arhatis, etc.

Advance Tax on Purchase of Immovable Property

Serial No	Period	Rate of Tax
01	Where the value of immovable property is up to 3 million	0%
02	Where the value of immovable property is more than 3 million	1%

Table: Advance Tax on Purchase of Immovable Property

Advance Tax on Sale or Transfer of Immovable Property

Serial No	Description	Rate of Tax
01	The rate of tax to be collected under Sec 236K shall be in accordance with the fair market value.	1%

Table: Advance Tax on Sale or Transfer of Immovable Property

Advance Tax on International Air Ticket

Serial No	Type of Ticket	Rate of Tax
01	First / Executive Class	Rs.16,000 per person
02	Others excluding Economy	Rs.12,000 per person
03	Economy	0

Table: Advance Tax on International Air Ticket

Advance Tax on Functions and Gatherings

Serial No	Locations	Rate of Tax
01	For Islamabad, Lahore, Multan, Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Sheikhupura, Dear Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbotabad, Kohat, Dera Ismail Khan, Quetta, Sibi, Loralai, Khuzdar, Dear Murad Jamali and Turbat.	5% of the bill ad valorem or Rs.20,000 per function, whichever is higher
02	For cities other than those mentioned above.	5% of the bill ad valorem or Rs.10,000 per function, whichever is higher

Table: Advance Tax on Functions and Gatherings

Advance Tax on Insurance Premium

Serial No	Type of Premium	Rate of Tax
01	General insurance premium	4%
02	Life insurance premium if exceeding Rs. 0.3 million in aggregate per annum	1%
03	Others	0%

Table: Advance Tax on Insurance Premium

Advance Tax on Extraction of Minerals

Serial No	Description	Rate of Tax
01	The rate of tax to be collected under Sec 236V as per value of the minerals.	5%

Table: Advance Tax on Extraction of Minerals

Withholding Income Tax Rates

Nature of Payment	Tax Rate		Nature of Tax (Advance / Final / Minimum Tax)
	Persons appearing in ATL	Persons not appearing in ATL

IMPORTS [Sec. 148 and Part II of First Schedule]
Industrial undertaking importing remittable steel and directly reduced iron for its own use	1%	2%	Advance Tax in the case of: Raw material or plant and machinery imported by industrial undertaking for own use Imports by large import houses Motor vehicles in CBU condition imported by manufacturers of motor vehicles Foriegn produced film for screening and viewing purposes Minimum Tax in the case of: Goods sold in the same condition those were imported Edible Oil Packing Material In case of import of plastic raw material (PCT) heading 39.01 to 39.12, packing material and edible oil
Persons importing potassic fertilizers under ECC’s decision No ECC-155/12/2004 dated 09-12-2004
Persons importing urea
Manufacturers covered under SRO 1125(1)/2011 dated 31-12-2011 for importing items as per said SRO
Persons importing gold
Persons importing cotton
Persons importing LNG	1%	2%
Persons importing pulses	2%	4%
Industrial undertaking importing plastic raw material (PCT) Heading 39.01 to 39.12 for its own use	1.75%	Companies: 11% Others: 12%
Commercial importers, importing plastic raw material (PCT) Heaing 39.01 to 39.12	4.5%
Commercial importers covered under SRO 1125(I)/2011 dated 31-12-2011	3%	6%
Persons importing coal	4%	8%
Persons importing finished pharmaceutical products that are not manufactured in Pakistan, as certified by the Drug Regulatory Authority of Pakistan	4%	8%
Ship breaker on import of ships	4.5%	9%
Companies and industrial undertakings not covered above	5.5%	11%
Others	6%	12%

DIVIDEND, INCLUDING DIVIDEND IN SPECIE [Sec. 150, 236S, Division I Part III First Schedule & Clause 11B Part IV Second Schedule]
Dividend from a company where no tax is payable by such company due to exemption of income or carry forward of business losses or claim of any tax credits	25%	50%	Final Tax
Inter-corporate dividend within the group companies covered under group taxation, where return of the group has been filed for the latest completed tax year	0%	0%
Other cases, including repatriation of after-tax profits by branches of foreign companies	15%	30%

RETURN ON INVESTMENT IN SUKUKS [Sec. 150A, Division IB Part III First Schedule]
Received by Company	15%	30%	Final Tax
Received by an individual or an AOP, if profit is more than Rs.1 million	12.5%	25%
Received by an individual or an AOP, if profit is less than Rs.1 million	10%	20%

PROFIT ON DEBT [Sec. 150A, Division IB Part III First Schedule]
Where debt yield is up to Rs.500,000	10%		Advance Tax in the case of companies Minimum Tax in other cases
Where debt yield is above Rs.500,000	15%	30%

PAYMENTS TO NON-RESIDENTS [Sec. 152, Division IV Part I First Schedule & Division III First Schedule]
Royalty or fee for technical services	15%	30%	Minimum Tax
Fee for offshore digital services	5%	10%
Contracts or related services	7%	14%
Insurance or re-insurance premium	5%	10%
Advertisement services to a non-resident media person relaying from outside Pakistan	10%	10%
Execution of contract by sportspersons	10%	20%
Any other receipt	20%	40%

PAYMENTS TO PERMANENT ESTABLISHMENT (PE) OF NON-RESIDENTS [Sec. 152, Division II Part III First Schedule]
Sale / supply of goods by PE of non-resident company	4%	8%	Minimum Tax
Sale / supply of goods by PE of other non-residents	4.5%	9%
Rendering / providing of services by PE of non-resident company	8%	16%
Rendering / providing of services by PE of other non-residents	10%	20%
Rendering / providing of transport services	2%	4%
Execution of contract other than contract for sale or services by PE of non-resident company	7%	14%
Execution of contract other than contract for sale or services by PE of other non-residents	7%	14%

PAYMENTS FOR FOREIGN PRODUCED COMMERCIALS [Sec. 152, Division II Part III First Schedule]
Payment against foreign produced advertisement commercial to non-residents	20%		Final Tax

PAYMENTS FOR SUPPLY OF GOODS [Sec. 153(1)(a), Division III Part III First Schedule & Clause 24A Part II Second Schedule]
Sale of rice, cotton seed oil and edible oil	1.5%	3%	Advance Tax in case of listed companies and companies engaged in manufacturing Minimum Tax for other cases
Sale by distributors of cigarettes and pharmaceutical products and large import houses	1%	2%
Sale of goods by FMCG distributors, which are companies	2%	4%
Sale of goods by FMCG distributors, which are not companies	2.5%	5%
Sale of any other goods by companies	4%	8%
Sale of any other goods by other than companies	4.5%	9%
No tax to be withheld for payments in case of: Imported goods sold by an importer where tax under Sec. 148 has been paid Yarn sold by traders to taxpayers specified in the sales tax zero-rated regime as provided under clause (45A) of Part IV of Second Schedule Purchase of an asset under a lease and buy back agreement by modarabas, leasing / banking companies or financial institutions

PAYMENTS FOR SERVICES [Sec. 153(1)(b), 153(2) Division III Part III First Schedule & Division IV Part III First Schedule]
Person providing advertising services (electronic and print media services)	1.5%	3%	Minimum Tax
Persons providing transport services, freight forwarding services, air cargo services, courier services, manpower outsourcing services, hotel services, security guard services, software development services, IT services and IT enabled services as defined under Clause 133 of Part I of Second Schedule, tracking services, advertising services (other than by print or electronic media), share registered services, engineering services, car rental services, building maintenance services, services rendered by PSE and PMEL, inspection, certification, testing and training services	4%	8%
Companies providing other services	8%	16%
Non-company entities providing other services	10%	20%
By export houses for services rendered for stitching dyeing, printing, embroidery, washing, sizing and weaving	1%	2%
No tax to be withheld for payments in case of payment for securitisation of receivables by Special Purpose Vehicles to Originators. Any tax deducted by a person making payment for a Special Purpose Vehicle, on behalf of the Originator, the tax is credited to the Originator.

PAYMENT ON ACCOUNT OF EXECUTION OF CONTRACTS [Sec. 153(1)(c) and Division III Part III First Schedule]
To companies	7%	14%	Advance Tax for listed companies Minimum Tax for non-listed companies
To sportsperson	10%	20%	Minimum Tax
To others	7.5%	15%

PAYMENT OF ROYALTY TO RESIDENT PERSONS [Sec. 153b and Division IIIb Part III First Schedule]
On gross amount of royalty	15%	30%	Advance Tax

EXPORTS [Sec. 154, Division IV Part III First Schedule & Clause 47C Part IV Second Schedule]
At the time of realisation of proceeds on export of goods (Exemption to cooking oil or vegetable ghee exported to afghanistan if tax u/Sec. 148 is paid)	1%		Final Tax Exporters may opt at the time of filing of return that the tax collected to be treated as Minimum Tax
Indenting commission on realisation of proceeds on account of commission to indenting agent	5%
Inland back to back LC by exporter on sale of goods under inland back to back LC or any other arrangement as may be prescribed by FBR	1%
Export of goods by units located in EPZ	1%
Payment for a firm contract by direct exporters or export houses registered under DTRE Rules, 2001 to an indirect exporter as per the said Rules.	1%

PROPERTY INCOME / RENTALS [Sec. 155, Division V Part III First Schedule]
To Companies	15% of the gross amount of rent			Advance Tax
To Individuals & AOPs	Annual Rent (Rs.)		Tax Rate
	From	To
	Up to 200,000		Nil
	200,001	600,000	5% of the amount exceeding Rs.200,000
	600,001	1,000,000	Rs.20,000 + 10% of the amount exceeding Rs.600,000
	1,000,001	2,000,000	Rs.60,000 + 15% of the amount exceeding Rs.1,000,000
	2,000,001	4,000,000	Rs.210,000 + 20% of the amount exceeding Rs.2,000,000
	4,000,001	6,000,000	Rs.610,000 + 25% of the amount exceeding Rs.4,000,000
	6,000,001	8,000,000	Rs.1,110,000 + 30% of the amount exceeding Rs.6,000,000
	Above Rs.8,000,000		Rs.1,710,000 + 35% of the amount exceeding Rs.8,000,000

PRIZES AND WINNINGS [Sec. 156, Division VI Part III First Schedule]
Prize on prize bonds and crossword puzzle	15%	30%	Final Tax
Winning from a raffle, lottery, prize on winning a quiz or prizes related to companies’ sales promotion schemes	20%	40%

PETROLEUM PRODUCTS [Sec. 156A, Division VIA Part III First Schedule]
Commission or discout to petrol pump operators on petroleum products	12%	24%	Final Tax

WITHDRAWAL OF BALANCE UNDER PENSION FUND [Sec. 156B]
Withdrawal before retirement age	Average rate of tax for 3 preceding years or rate applicable for the year whichever is lower	Final Tax (Separate Block of Income)
Withdrawal in excess of 50% of accumulated balance at or after the retirement age

CASH WITHDRAWAL FROM BANKS [Sec. 231A, Division VI Part IV First Schedule & Clause 28B Part II Second Schedule]
Exchange company, duly licensed and authorised by SBP, subject to specified conditions	0.15%		Advance Tax
Cash withdrawals from Pak Rupees bank accounts where foreign remittances credited directly such accounts	Exempt	Exempt	Exempt
Other cases where total withdrawals in a day exceeds Rs.50,000 from all bank accounts	Exempt	0.6%	Advance Tax

TRANSACTIONS IN BANKS – Banking Instrument purchased against payment in cash [Sec. 231A, Division VIA Part IV First Schedule]
Sale against cash of any instrument including demand draft, payment order, CDR, STDR, RTC or any other instrument of bearer nature except payment is made throuh a crossed cheque	Exempt	0.6%	Advance Tax

TAX ON MOTOR VEHICLES [Sec. 231B, 234 Division VII Part IV First Schedule & Division III Part IV First Schedule]
Tax on purchase / transfer of motor vehicles along with annual motor vehicle tax (Not applicable to Federal, Provincial and Local Govts., Foreign Diplomatic Missions in Pakistan)	Various rates based on engine capacity		Advance Tax
On value of motor vehicle leased by Leasing Companies, Scheduled Banks, Investment Banks, DFIs or Modarabas	0%	4%

BROKERAGE & COMMISSION [Sec. 233, Division II Part IV First Schedule]
Advertising Agents	10%	20%	Minimum Tax
Life Insurance Agents where commission received is less than Rs.0.5 million per annum	8%	16%
Others	12%	24%

COLLECTION OF TAX BY STOCK EXCHANGES IN LIEU OF TAX ON COMMISSION [Sec. 233A, Division IIA Part IV First Schedule]
On purchase of shares	0.02%	0.04%	Advance Tax
On sale of shares	0.02%	0.04%

COLLECTION OF TAX BY NCCPL FROM MEMBERS OF STOCK EXCHANGES [Sec. 233AA, Division IIB Part IV First Schedule]
In respect of financing of carryover trade, margin financing, margin trading nor securities lending in shares business	10%	Advance Tax

CNG STATIONS [Sec. 233A, Division VIB Part IV First Schedule]
On the amount of gas bill	4%	6%	Minimum Tax

ELECTRICITY CONSUMPTION [Sec. 235, Division IV Part IV First Schedule & Clause 66 Part IV Second Schedule]
Electricity bil of commercial or industrial consumers [Exporters-cum-manufacturers are exempt from this collection]	Various rates	Minimum Tax (for non-corporate taxpayers upto Rs.360,000) Advance Tax (for other cases)

DOMESTIC ELECTRICITY CONSUMPTION [Sec. 235A, Division XIX Part IV First Schedule]
Where the amount of monthly bill is less than Rs.75,000	0%	Advance Tax
Where the amount of monthly bill is Rs.75,000 and above	7.5%

STEEL MELTERS, RE-ROLLERS ETC. [Sec. 235B / Sec 153(1)]
Electricity consumed for the production of steel billets, ingots and mild steel (MS products) excluding stainless steel by steel-melters, steel re-rollers, composite steel units (registered for the purpose of Chapter XI of Sales Tax Special Procedure Rules, 2007)	Rs.1 per unit of electricity consumed	Non-adjustable / Final Tax

TELEPHONE USERS [Sec. 236, Division V Part IV First Schedule]
Mobile phone bills and prepaid telephone cards	12.5%	Advance Tax
Landline bills exceeding Rs.1,000	10%
Post-paid internet and prepaid internet cards	12.5%

SALE BY AUCTION [Sec. 236A, Division VIII Part IV First Schedule]
Sale of property, goods or lease of right by public auction or tender	10%	20%	Advance Tax
Sale of lease of the right to collect tolls	10%	20%	Final Tax

PURCHASE OF DOMESTIC AIR TICKETS [Sec. 236B, Division IX Part IV First Schedule]
Tickets for routes of Balochistan coastal belt, Azad Jammu and Kashmir, FATA, Gilgit-Baltistan and Chitral	Exempt	Not Applicable
Other routes	5%	Advance Tax

SALE OR TRANSFER OF IMMOVABLE PROPERTY [Sec. 236C, Division X Part IV First Schedule]
To be collected from seller or transferor at the time of recording or attesting the transfer, where holding period of property is up to 5 years.	1%	2%	Advance Tax
To be collected from seller or transferor at the time of registering or attesting the transfer, where holding period or property is above 5 years	0%

FUNCTIONS & GATHERINGS [Sec. 236D, Division XI Part IV First Schedule]
To be collected from a person arranging or holding a function on total amount of bill and also for food, service or facility	5%	Advance Tax
Function of marriage for Islamabad, Lahore, Multan, Faisalabad, Rawalpindi, Gujranwala, Bahawalpur, Sargodha, Sahiwal, Sheikhupura, Dear Ghazi Khan, Karachi, Hyderabad, Sukkur, Thatta, Larkana, Mirpur Khas, Nawabshah, Peshawar, Mardan, Abbotabad, Kohat, Dera Ismail Khan, Quetta, Sibi, Khuzdar, Dera Murad Jamali and Turbat	Higher of 5% of the bill ad valorem or Rs.20,000 per function
For cities other than those mentioned above	Higher of 5% of the bill ad valorem or Rs.10,000 per function

CABLE OPERATORS AND OTHER ELECTRONIC MEDIA [Sec. 236F, Division XIII Part IV First Schedule]
From IPTV, FM Radio, MMDS, Mobile TV, Mobile Audio, Satellite TV Channel and Landing Rights	20% of the permission fee or renewal fee	Advance Tax
From cable operators	Various Rates
From every TV channel in respect of screening or viewing Foreign TV Drama serial or a play in any language other than English	50% of the permission fee or renewal fee

TAX ON SALES TO DISTRIBUTORS, DEALERS AND WHOLESALERS BY MANUFACTURERS AND COMMERCIAL IMPORTERS [Sec. 236G, Division XIV Part IV First Schedule]
On sale of fertilizers	0.7%	1.4%	Advance Tax
On sale of electronics, sugar, cement, iron & steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint, batteries or foam	0.1%	0.2%

TAX ON SALES TO RETAILERS AND WHOLESALERS BY MANUFACTURERS. DISTRIBUTORS, DEALERS, WHOLESALERS OR COMMERCIAL IMPORTERS [Sec. 236H, Division XV Part IV First Schedule]
On sale of electronics	1%	2%	Advance Tax
On sale of sugar, cement, iron & steel products, motorcycles, pesticides, cigarettes, glass, textile, beverages, paint, batteries or foam	0.5%	1%

TAX ON SALES OF CERTAIN PETROLEUM PRODUCTS [Sec. 236HA, Division XVA Part IV First Schedule]
On supply of petroleum products to a petrol pump operator or distributor	0.5%	1%	Advance Tax

COLLECTION OF TAX BY EDUCATIONAL INSTITUTIONS WHERE FEE EXCEEDS Rs.200,000 [Sec. 236I, Division XVI Part IV First Schedule]
From resident	5%	Advance Tax
From non-resident	Exempt	Not Applicable

TAX ON DEALERS, COMMISSION AGENTS AND ARHATIS ON ISSUANCE / RENEWAL OF LICENSE [Sec. 236J, Division XVII Part IV First Schedule]
To be collected by market committees	Various rates	Advance Tax

PURCHASE OR TRANSFER OF IMMOVABLE PROPERTY [Sec. 236K, Division XVIII Part IV First Schedule]
On fair market value	1%	2%	Advance Tax

INTERNATIONAL AIR TICKETS [Sec. 236L, Division XX Part IV First Schedule]
First / Executive Class	Rs.16,000 per person	Advance Tax
Others Excluding Economy	Rs.12,000 per person
Economy	Nil

ALL TYPE OF BANKING TRANSACTIONS OF NON-FILER [Sec. 236P, Division XXI Part IV First Schedule]
Transactions otherwise through cash above Rs.50,000 in aggregate from all bank accounts per day	Not Applicable	0.6%	Advance Tax

RENT OR PAYMENT FOR RIGHT TO USE MACHINERY AND EQUIPMENT [Sec. 236Q, Division XXIII Part IV First Schedule]
To be collected in case of industrial, commercial and scientific equipment and machinery	10%	Final Tax
The deduction shall not be applicable in the following cases: Agricultural machinery; and Machinery owned and leased by leasing companies, investment banks, modarabas, scheduled banks or DFIs

EDUCATION RELATED EXPENSES REMITTED ABROAD [Sec. 236R, Division XXIV Part IV First Schedule]
Remittance of tuition fee, boarding and lodging expenses, payments for distant learing programmes and any other expenses related to foreign education	5%	Advance Tax

ADVANCE TAX ON INSURANCE PREMIUM [Sec. 236U, Division XXV Part IV First Schedule]
General Insurance Premium	0%	4%	Advance Tax
Life Insurance Premium exceeding Rs.0.3 million per annum	0%	1%
Others	0%

ADVANCE TAX ON EXTRACTION OF MINERALS [Sec. 236V, Division XXVI Part IV First Schedule]
Value of minerals extracted, produced dispatched and carried away from licensed or leased areas of mines – to be collected by provincial revenue authority / board	0%	5%	Advance Tax

ADVANCE TAX ON PURCHASE OF TOBACCO [Sec. 236X]
To be collected by Pakistan Tobacco Board or its contractor on value of tobacco purchased by a person including manufacturers of cigarettes	0%	5%	Advance Tax

ADVANCE TAX ON REMITTANCE ABROAD THROUGH CREDIT, DEBIT OR PREPAID CARDS [Sec. 236Y, Division XXVII Part IV First Schedule]
Gross amount remitted from abroad	1%	3%	Advance Tax

Table: Withholding Income Tax Rates

Customs

Goods imported and exported from Pakistan are liable to rates of Customs duties as prescribed in Pakistan Customs Tariff. Customs duties in the form of import duties and export duties constitute about 37% of the total tax receipts. The rate structure of customs duty is determined by a large number of socio-economic factors. However, the general scheme envisages higher rates on luxury items as well as on less essential goods. The import tariff has been given an industrial bias by keeping the duties on industrial plants and machinery and raw material lower than those on consumer goods.

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Federal Excise

Federal Excise duties are leviable on a limited number of goods produced or manufactured, and services provided or rendered in Pakistan. On most of the items Federal Excise duty is charged on the basis of value or retail price. Some items are, however, chargeable to duty on the basis of weight or quantity. Classification of goods is done in accordance with the Harmonized Commodity Description and Coding System which is being used all over the world. All exports are exempted from Federal Excise Duty.

Sales Tax

The following personnel shall make an application in the Form STR-1, transmitted to the CRO “Central Registration Office” electronically or through registered mail or courier services for registration under Sales Tax Rules, 2006, Chapter I “Registration, compulsory Registration and De-Registration” as per following conditions:

PERSON	CONDITION	LIABILITY EXEMPTION
Manufacturer	Value of Taxable supplies does not exceed Rs. 5,000,000 in any period during the last twelve month or whose annual utility bills does not exceed Rs 600,000 during the last 12 months.	Supplies will be exempted under Sr. 42 of the Sixth Schedule.
Retailer	Value of supplies does not exceed Rs. 5,000,000 in any period during the last twelve month.	Supplies will be exempted under Sr. 42 of the Sixth Schedule.
Importer		Person is liable to be Registered.
Wholesaler / Supplier including Dealer and Distributor		Person is liable to be Registered.

Table: Sales Tax Liability Exemption

As per newly inserted Section 8B of the Act, a registered person is restricted to claim adjustment of input tax to the extent of ninety percent of output tax for that tax period. Further, it permits the adjustment of input charged in acquisition of fixed assets in twelve equal monthly installments after the start of production of a new unit. The Board is empowered to exclude any person from the above purview.

However, the input tax inadmissible in excess of 90% of the output tax, may be allowed on yearly basis in the second month following the end of the financial year of the registered person subject to the following condition namely:

• In case of a registered person whose accounts are subject to audit under the Companies Ordinance, 1984 upon furnishing a statement along with annual audited accounts duly certified.

• In other cases, adjustment may be allowed as per specific notification issued by the Board.

Time of Supply

Sales Tax was taxable at the earlier of the time of delivery of goods or when any payment is received by the supplier in respect of such supply. If has now been restricted only to the time of delivery of goods by the supplier irrespective of the actual time of payment.

Through newly inserted subsection (1A) of Section 23, the Board is empowered to restrict a registered person to use as many number of business bank accounts as may be specified.

As per amendment in Section 24 of the Act, retention of record and documents by a registered person has been enhanced from three years to five years.

A new concept of Withholding Agent has been introduced through SRO No 550(1)/2007, dated 30th June, 2007 wherein a withholding agent shall deduct as amount equal to one fifth (1/5th) of total sales tax shown in the sales tax invoice issued by the supplier and make payment of the balance amount to him.

Default Surcharge

• For first six months 1% per month

• For subsequent period till the final payment 1.5% per month

• In case of tax fraud till the final payment 2% per month

Offences and Penalties

OFFENCES	PENALTIES	SECTION REFRENCE
Non filing of returns	Five thousand rupees within fifteen days, one hundred rupees for each day of default	Sec. 26
Non issuance of invoices	Five thousand rupees of five percent of the amount which ever is higher	Sec. 23
Issuance of invoices without authority	Ten Thousand rupees or five percent of the amount which ever is higher	Sec. 3, 7 and 23
Non notification change in the particulars of registration	Five Thousand rupees	Sec. 14
Failure of deposit the amount of tax due	Ten Thousand rupees or five percent of the amount whichever is higher Within fifteen days, give hundred rupees each day of default. No penalty for miscalculation. Non payment and imprisonment for three year or both	Sec. 3, 6, 7 and 48
Repeation of miscalculation for less tax during the year	Ten Thousand rupees or three percent of the amount whichever is higher
Non filing of application registration	Ten Thousand rupees or five percent of the amount whichever is higher Non filing after sixty days conviction and imprisonment for three years
Non maintenance of records	Ten Thousand rupees or five percent of the amount whichever is higher
Non compliance with Section 25	Five Thousand rupees	Sec. 25
Receipt of second notice	Ten Thousand rupees
Receipt of third notice	Fifteen Thousand rupees
Non filing of information required by the board	Ten Thousand rupees	Sec. 26
Filing of false documents Destruction / alteration of record Making of false statement	Twenty Five Thousand rupees or one hundred percent of the amount whichever is higher. Conviction and imprisonment of three years or with both	Sec. 2 (37) and General
Obstruction of Sales Tax Officer	Twenty Five Thousand rupees or one hundred percent of the amount whichever is higher. Conviction and imprisonment of three years or with both	Sec. 25, 38 and 38A
Abetment in commissioning of tax fraud	Twenty Five Thousand rupees or one hundred percent of the amount whichever is higher. Conviction and imprisonment of three years or with both	Sec. 2 (37)
Violation of any embargo placed or removal of goods in connection with recovery of tax	Twenty Five Thousand rupees or one hundred percent of the amount whichever is higher. Conviction and imprisonment of three years or with both	Sec. 48
Obstructions of Sales Tax Officer	Twenty Five Thousand rupees or one hundred percent or three percent of he amount whichever is higher	Sec. 31 and General
Non compliance with Section 73	Five thousand rupees or three percent of the amount whichever is higher	Sec. 73
Non fulfillment of notification issued under any of the provisions of this Act	Five Thousand Rupees of three percent of the amount whichever is higher	Sec. 71 and General
Sales Tax officer causing loss to the sales tax revenue	Convection and imprisonment for three year or five equal to tax, or with both	General
Contravention with provision of this act and no penalty has been provclassed	Five Thousand Rupees or three percent of the amount, which ever is higher	General
Non filing of the summary of sale or purchase invoices	Twenty Five Thousand Rupees	Sec. 26(5)

Table: Offences and Penalties

Sales Tax is levied at various stages of economic activity at the rate of 15 per cent on:

• All goods imported into Pakistan, payable by the importers;

• All supplies made in Pakistan by a registered person in the course of furtherance of any business carried on by him; and

• There is an in-built system of input tax upto 90% adjustment and a registered person can make this adjustment of tax paid at earlier stages against the tax payable by him on his supplies. The tax paid at any stage does not exceed 15% of the total sales price of the supplies.

Performing a High Quality Audit

In today’s ever changing global economy, businesses need trusted advisers. Our audit specialists take the time to understand your business as well as the industry in which you operate, whether it is in Pakistan and / or abroad.

Our audit approach focuses on understanding the clients’ business and control issues from the inside out. It combines a rigorous risk assessment, diagnostic processes, and audit testing procedures as well as a continuous assessment of our clients’ service performance. Our state of the art, audit tool, Audit System supports all phases of the audit process including planning, executing, reporting.

Investment Advisory Services

All investment carries some risk and thus needs careful analysis and expert advice. The key to be a successful investor is to achieve appropriate risk/return trade off by identification of risks that exist and their proactive management.

Our Investment Advisory Service professionals specialize in identifying risks arising from regulation, competition and macro economic forces and designing strategies to manage it to your advantage. Our range of services includes:

• Advice on analyzing investment prospects and mode of doing business in Pakistan including advising on the form of legal entity, incorporation, obtaining of necessary permissions and help in dealing with local regulators.

• Identification of suitable business partners and conducting due diligence.

• Feasibility studies including preparation of projected financial statements and project.

• Appraisal through NPV, IRR, Payback and DCF analysis including cost assessment and revenue projections.

• Sensitivity analysis

• Tariff and pricing studies

NOTE:

The contents as narrative above are subject to change through annual amendment.

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Our Core Competencies

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