National Tax Council told to decide matter of dual taxation on stockbrokers

The Lahore High Court has instructed the National Tax Council to resolve a dispute concerning the collection of sales tax on stock trading services within two weeks, according to a recent ruling. This decision followed a petition filed by Zafar Securities and others. The court's two-member bench emphasized the importance of the NTC hearing all relevant parties and providing a written decision based on the law.

The petitioners argued that the companies, headquartered in Lahore, and their employees and customers were primarily located in Punjab. They also noted that the companies had been remitting sales tax on their services to the Punjab Revenue Authority. The LHC highlighted a potential issue of double taxation, as the Sindh Revenue Board had similarly demanded sales tax on the same services, citing that stock trading across Pakistan was conducted through the central system of the Pakistan Stock Exchange, based in Karachi.

The petition claimed that having two provincial tax authorities claiming jurisdiction over the same services could lead to unfair tax burdens. The petition was filed with the NTC on December 5, 2025, but remained unresolved for over nine months. The court directed the NTC to rule on the matter within the two-week timeframe, stating that if the council determines the tax to be payable to Sindh, the amount already deposited with Punjab should be transferred to Sindh, and the company should not face a second tax demand, penalty, or additional liability.