The modern ‘Skin-walker’ of provincial taxation, a creature of duality and shifting forms, has been unleashed upon Pakistan’s compliant taxpayers. It is a beast not of myth and folklore but of conflicting tax regimes and legal ambiguity, leaving a trail of confusion and compliance headaches in its wake.

This creature has taken a particularly potent form in the recent adoption of “Negative List” based service tax regimes by the federation and the provinces.

The concept is elegant in its simplicity: everything is a service and therefore taxable, except for the specific items explicitly listed as “negative.” This is a stark departure from the previous “Positive List” approach, where only the services mentioned in 2nd Schedules to respective Acts were subject to tax.

The Punjab Revenue Authority (PRA) and the Government of Punjab, through the Finance Bill 2025, have been among the first to fully embrace this new philosophy.

The Sindh Revenue Board (SRB) has followed a similar path, basing its negative list on the UN Central Product Classification system. Meanwhile, Khyber........

© Business Recorder