Punjab Extends Tax Net To Beauty Salons

As part of its efforts to attain high revenue target for the current fiscal, the Punjab Revenue Authority (PRA) has collaborated with the Punjab Information Technology Board (PITB), to introduce an invoice monitoring system for beauty parlours running across the province.

In addition, the salon service provider sector has been given potential taxpayer status now, aiming to encourage businesses to file their taxes in the coming years. The sector offers tremendous scope for revenue generation from small and mid-sized businesses.

The salons operating in Lahore under the umbrella of Hair and Beauty Salons Association had been demanding sales tax cut for a long time, PRA Additional Commissioner Shahzad Gondal told local media.

“The lobby group had even filed a request, asking the PRA to consider reducing sales tax on beauty parlours from 16% to around 5%.

Gondal said that after a series of meetings with industry representatives to find a feasible solution, it was mutually decided that the proposed tax deductions would only be offered to those salons that opted for the invoice monitoring system. The invoice monitoring system will be used to track and monitor sales invoices in the business premises on a real-time basis.

“It is expected that the monitoring system will be inaugurated on April 10 this year. These salons generate a reasonable income and will be registered with the PRA.”

There are currently 287 beauty service providers are registered taxpayers, out of them 209 are based in Lahore. According to PRA statistics, at present, approximately 2,000 hair and beauty salons are operational in Pakistan’s second-largest city.

PRA has received Rs 4-8 million in revenues annually based on seasonal activities. It has expanded the tax base from 21 services in 2012-13 to 59 services in 2015-16, generating revenue of Rs. 61.45 billion.

Although the figure is still a pittance compared to the estimates of the provincial government at the beginning of fiscal year 2015-16, it is nevertheless 41 percent higher than the preceding year.

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