PRA vs FBR vs SRB: restaurant sales tax in Pakistan by province

Here's the short version: most restaurants report their sales tax on services to a provincial revenue authority (PRA in Punjab, SRB in Sindh, KPRA in Khyber Pakhtunkhwa, BRA in Balochistan), not to the FBR. The FBR handles federal sales tax on goods and your income tax, but preparing and serving food is a service, and services are taxed by the provinces. The big exception is Islamabad, where restaurant services fall under the ICT regime administered by the FBR.

Key takeaways

• Most Pakistani restaurants pay sales tax on services to a provincial authority, PRA (Punjab), SRB (Sindh), KPRA (KP) or BRA (Balochistan), not the FBR.
• The FBR handles your federal income tax and administers Islamabad's ICT regime, the one case where a restaurant's service tax is genuinely federal.
• Standard provincial rates have sat in the 15–16% range, with reduced rates for card and digital payments, but rates change every budget, so verify the current figure.
• Punjab pushed a card/digital-payment tax reduction for restaurants in 2026, so how your customer pays can change the tax on the bill.

The short answer

The constitutional split is simple: the federation taxes goods; the provinces tax services. A restaurant sells a service (dining, preparation, serving), so your sales tax on that service belongs to your province's authority. That's why a restaurant in Lahore deals with the PRA and one in Karachi deals with the SRB, not the FBR, for the sales tax on their bills.

The FBR still matters to you in two ways: your income tax is federal, and if you operate in Islamabad, your restaurant services are taxed under the Islamabad Capital Territory ordinance, which the FBR administers. Everywhere else, sales-tax-on-services is a provincial matter.

Why “FBR” is usually the wrong word for restaurant tax

Everyone says “FBR” because it's the famous one: the authority in the headlines. But for day-to-day restaurant tax in Pakistan, the FBR is usually the wrong word. Your bill-level sales tax is provincial, collected by the PRA, SRB, KPRA or BRA depending on where you trade. Confusing the two is one of the most common mistakes owners make when they register, and it can send your filings to the wrong regime.

Which authority applies to your restaurant?

So a chain with outlets in Lahore, Karachi and Islamabad reports to three different regimes (PRA, SRB and the FBR-administered ICT), each with its own registration, invoicing and filing. This is exactly why multi-branch brands need a POS that can handle province-specific fiscal invoicing rather than a one-size-fits-all setup.

SRB, KPRA and the other provinces

• Punjab (PRA). The busiest regime for restaurants by sheer number of outlets, and the most active on card-payment incentives.
• Sindh (SRB). Karachi, Hyderabad and the rest of Sindh report to the Sindh Revenue Board at the standard provincial rate, with reduced rates in the situations Sindh chooses to incentivise.
• Khyber Pakhtunkhwa (KPRA). A restaurant in Peshawar, Abbottabad or Mardan registers with the KP Revenue Authority and invoices under its system; KPRA has likewise used reduced-rate and digital-invoicing measures to widen documentation.
• Balochistan (BRA). Quetta and other Balochistan outlets report to the Balochistan Revenue Authority under the same goods-versus-services logic.

The through-line: same principle, four provincial authorities, each with its own registration portal, invoice format and filing calendar, plus the FBR-administered ICT in Islamabad.

Rates, and why you must verify every one of them

Provincial sales tax on restaurant services in Pakistan has typically sat in the 15–16% range at the standard rate, with reduced rates for payments made by card or digital channels in provinces that offer them. Punjab, Sindh and KP have each used reduced-rate incentives at various points to push documentation and card usage.

Here's the crucial caution: these rates change with every provincial budget and Finance Act. A number that's correct this quarter can move next July. Treat the figures here as orientation, confirm the current rate with your provincial authority or a tax professional, and make sure your POS applies whatever rate is in force.

The card-payment rule that can cut your tax

Here's the practical insight most owners miss. Several provinces charge a lower sales-tax rate on restaurant bills paid by card or digital wallet than on cash bills. The logic is documentation: governments want transactions on the record, so they reward card payments with a reduced rate.

In 2026 this became especially prominent in Punjab, where the provincial government moved to reduce the tax burden on restaurant and salon bills paid through cards and digital channels, alongside a simplified digital tax-deduction system. The upshot for a Lahore or Rawalpindi restaurant: the tax rate your customer pays can depend on how they pay. Encouraging card and digital payments can lower the tax line on the bill, which customers notice, and it keeps you cleanly documented.

To use this properly, your POS has to apply the correct rate automatically based on payment method, and print a compliant invoice for the authority. Done manually, it's error-prone; done by the system, it's invisible and correct every time.

What compliance means for your POS

Compliance isn't just filing: it's what prints on every bill. A restaurant POS operating in Pakistan should:

• Apply the correct provincial rate for your city's authority (PRA/SRB/KPRA/BRA or ICT).
• Handle the card-versus-cash reduced rate automatically, so the right tax shows on each bill.
• Produce a fiscal-compliant invoice your authority accepts, with the required fields and, where mandated, integration to the authority's invoicing system.
• Keep working offline, so a load-shedding cut never stops you issuing a compliant bill.

How Bhookly handles this

Bhookly files each sale with the tax authority at the moment of payment, and the receipt carries the authority's official invoice number and QR code. Fiscal invoicing is live with FBR, PRA and KPRA. For other provincial authorities, confirm coverage with the Bhookly team.

• Tax per payment type. Cash, card and online each carry their own rate where the law requires, so a card bill is taxed at the card rate with no arithmetic from the cashier. A bill printed before payment shows the total by each payment type, so the guest sees the difference before choosing how to pay.
• A retry queue. If the authority's system is down, the sale still completes and the filing retries by itself until it is accepted. A sale is never filed twice.
• A tax report for the return. Tax is shown by rate, charged against filed, so the monthly figures are ready for your accountant, who can have a read-only login.
• Records that cannot be edited. The tax log cannot be changed or deleted, and a closed day is final.

Frequently asked questions

Do restaurants pay tax to FBR or PRA in Pakistan?

In Punjab, restaurants pay sales tax on services to the PRA, not the FBR. The FBR handles your federal income tax and administers Islamabad's ICT regime. Sindh restaurants report to the SRB, KP to the KPRA, and Balochistan to the BRA.

What is the sales tax rate on restaurants in Pakistan?

It has typically been in the 15–16% range at the standard rate, with reduced rates for card or digital payments in some provinces. Rates change with each provincial budget, so confirm the current figure for your province before relying on it.

Why is restaurant tax lower when customers pay by card?

Several provinces charge a reduced sales-tax rate on card and digital restaurant payments to encourage documentation. Your POS should apply the correct rate automatically by payment method.

Which tax authority does an Islamabad restaurant report to?

Islamabad restaurants fall under the Islamabad Capital Territory (Tax on Services) regime, which is administered by the FBR: the main case where “FBR” genuinely applies to a restaurant's service tax.

What if I have branches in different provinces?

Each branch reports to its own province's authority (PRA, SRB, KPRA, BRA) or the FBR-administered ICT in Islamabad. You'll need registration and compliant invoicing in each, which is far easier with a POS that supports province-specific fiscalisation.

Does Bhookly file restaurant sales with FBR and PRA automatically?

Yes. Bhookly files each sale with FBR, PRA and KPRA at the moment of payment and prints the official invoice number and QR code on the receipt. If the authority's system is down, the sale completes and the filing retries until it is accepted, and a sale is never filed twice. Tax follows the payment type, so cash and card bills each get the rate your province sets.

The bottom line

For most Pakistani restaurants, sales tax on services is a provincial matter (PRA, SRB, KPRA or BRA), with the FBR handling income tax and Islamabad's ICT. Rates hover around 15–16% but change yearly, and card or digital payments can carry a lower rate. Get the authority right, keep your invoicing compliant, and let your POS apply the correct rate automatically.