If you’re new to business or filing taxes in Pakistan, terms like NTN, Sales Tax, and GST can feel confusing. But don’t worry—once you break them down, they’re not as intimidating as they sound. Let’s explore what each term means and how they differ.

1. NTN (National Tax Number)

Think of NTN as your tax identity card. Issued by the Federal Board of Revenue (FBR), it’s a unique number that registers you as a taxpayer—whether you’re a business or an individual. You need an NTN to file income taxes, open a business bank account, or register a company. It doesn’t mean you’re paying tax yet—it just shows you’re in the system.

2. Sales Tax

Sales tax is a tax charged on the sale of goods and certain services. Businesses collect this tax from customers at the time of sale and then pay it to the government. If you’re a manufacturer, wholesaler, or retailer dealing in taxable goods, you’ll likely need to register for sales tax with the FBR.

3. GST (General Sales Tax)

GST is actually a type of sales tax used in Pakistan. It’s called “general” because it applies to most goods and some services, unlike specialized taxes that target specific items. GST is typically charged at 18% but can vary. In many everyday transactions—like buying electronics or clothing—you’re paying GST.

Key Differences

• NTN is an identity; sales tax and GST are actual taxes.
• GST is a form of sales tax, not a separate system.
• You need an NTN to register for sales tax or GST collection.

Understanding these basics helps you navigate Pakistan’s tax system with more confidence. As digital tax systems evolve, expect these registrations and payments to become even easier.