Find Accountancy, Audit and Tax expertise in Pakistan
There are over 500 accountancy firms operating in 11 locations in Pakistan, with the main groupings in the cities of Karachi and Lahore. All of the ‘Big Four’ (KPMG, Ernst and Young, PwC and Deloitte) have operations in the country. International Financial Reporting Standards (IFRS) are being taken up by large companies and financial institutions as well as small and medium sized enterprises. As the uptake is limited to public interest entities, however, Pakistan is considered to be in the third stage of production according to the IFRS Foundation. The World Economic Forum’s Global Competitiveness Report (2012-13) ranks Pakistan as 86 out of 143 countries with regards to strength of auditing and reporting standards, with a score of 4.4 out of 7, just short of the world mean of 4.6. The World Bank Ease of Doing Business Index (2011) places the country in a moderate 73rd position out of 183 countries worldwide in terms or resolving insolvency.
The Institute of Chartered Accountants of Pakistan (ICAP) is the regulatory body for accountancy and is the examining body for those seeking to enter the profession. It was established under The Chartered Accountants Ordinance 1961 and follows Chartered Accountants Byelaws 1983. Some are exempt from certain examinations, for instance those who have qualified with the Institute of Chartered Accountants of England and Wales, Scotland, Ireland, Australia or Canada. Some examinations and further training is, however, required of these professionals before admission to the body. ICAP currently represents some 5,322 members working in 46 countries around the world (2012). The Association of Certified Chartered Accountants (ACCA) has offices and examination centres in Pakistan.
The taxation system in Pakistan is undergoing many reforms. The Income Tax Ordinance (2001) has rationalised the income taxation system and the Securities and Exchange Commission of Pakistan has undertaken a corporate tax reforms. In 2012 income tax was charged on a progressive basis with different rates for men and women, women having a higher tax threshold. Salaried individuals are taxed from 0.5% to 20% and non-salaried individuals from 0.5% to 25%. As of 2011, the corporate tax rate was 35%, charged on a flat basis. Non-resident companies are taxed at 15% on some income sources and 30% on others. Incentives to encourage investments in alternative power sources include a 90% allowance on set up and equipment costs in the first year which is available to residents and non-residents. Businesses and corporations are considered resident if they are registered under Pakistani law or if management is entirely based in Pakistan. According to the World Bank Ease of Doing Business Index (2011), Pakistan ranks 158th out of 183 countries worldwide in relation to paying taxes. The World Economic Forum’s Global Competitiveness Report (2012-2013) gives Pakistan a score of 35.3 for total tax rate, placing the country in a strong 53rd position out of 141 countries, above India.
|Accountancy, Audit and Tax organisations in Pakistan|
|Association of Chartered Certified Accountants||