Commercial Goods Export Tax in Pakistan: Section 154 1.25% Minimum Tax & Withholding Guide

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On qualifying export proceeds of Rs. 10 million, a 1.25% deduction is Rs. 125,000. The calculation is simple; deciding that the receipt belongs in the relevant section 154 category is the essential first step.

Build the receipt reconciliation

Start with the export contract and invoice, match the proceeds to the bank realization record, and record the amount and date used for withholding. Reconcile bank charges, partial receipts and any differences rather than assuming the invoice total and realized amount are identical.

What changed in the schedule

Finance Act 2026 substitutes 1.25% for 1% in paragraphs (1) and (3) of Division IV, Part III, First Schedule. This guide illustrates that revised base rate. Exemption certificates, taxpayer-specific modifications and a different receipt classification can change the result.

Do not mix goods and services

A service export governed by section 154A should be assessed under that provision and its conditions. The same invoice currency or overseas customer does not make the legal classification identical.

Close the year separately

Retain certificates and reconcile the deduction to the return. A Rs. 125,000 bank deduction alone does not establish the exporter's entire annual liability. The exporters amendment overview covers the separate advance-tax omission and super-tax ratio test.

Source and scope

Finance Act 2026, official FBR gazette, PDF pages 57-61. Text reviewed on 14 October 2026. This explains the enacted amendment; a notification-dependent procedure must be checked separately before use.