by The Khyber Pakhtunkhwa (KP) Excise, Taxation and Narcotics Control Department has officially issued the revised professional tax rates for the fiscal year 2025-26. The updated taxation schedule impacts a wide range of professionals, businesses, and organizations operating within the province. These revisions are part of the provincial government’s broader revenue enhancement strategy aimed at improving tax compliance and strengthening the financial foundation of KP.
This blog breaks down the major updates, new tax slabs, affected sectors, and what business owners and professionals should be aware of moving forward.
📌 What is Professional Tax?
Professional tax is a provincial levy imposed on individuals and entities engaged in various professions, trades, callings, and employments. It applies to doctors, engineers, lawyers, accountants, contractors, shopkeepers, and companies—essentially anyone earning income through a professional occupation or business.
The tax is usually charged annually, and the responsibility for collecting and updating rates lies with the provincial excise departments.
✅ New Tax Structure for FY 2025-26
The KP Excise Department has revised the professional tax structure to reflect changes in business size, activity type, and revenue potential. The changes are expected to increase the tax base while offering a more equitable system of contribution.
Below is a summary of the updated tax slabs (approximate categories – actual rates may vary based on official notification):
1. Small Retailers and Shopkeepers
- Annual Turnover under Rs. 1 million: Rs. 500
- Annual Turnover between Rs. 1–5 million: Rs. 2,000
- Annual Turnover above Rs. 5 million: Rs. 5,000
2. Professionals (Doctors, Engineers, Lawyers, etc.)
- Private practitioners or consultants: Rs. 3,000 – Rs. 10,000 based on income level
3. Contractors and Builders
- Annual contracts below Rs. 5 million: Rs. 5,000
- Contracts above Rs. 5 million: Rs. 15,000 – Rs. 25,000
4. Factories and Industrial Units
- Small-scale (less than 10 employees): Rs. 10,000
- Medium to large enterprises: Rs. 25,000 – Rs. 50,000
5. Corporate Offices and Multinational Firms
- Flat rate based on turnover: Ranges from Rs. 50,000 to Rs. 100,000 annually
📂 Categories Newly Added or Updated
For FY 2025-26, the KP Excise Department has expanded the list of taxable professions to include:
- Freelancers and digital service providers
- E-commerce retailers
- Real estate agents and property dealers
- Private schools and coaching centers
- Fitness centers and gyms
- Beauty salons and spas
This move is aligned with the growing trend of digital and informal economies, ensuring that emerging sectors also contribute their fair share.
KP Excise Dept Issues New Professional Tax Rates for FY2025-26
🧾 Payment Process and Deadlines
The Excise Department has streamlined the payment process by offering both online and manual payment options. Taxpayers can generate challans via the KP Excise Department’s official portal or visit any nearby National Bank branch for manual submission.
The deadline for payment is September 30, 2025. Failing to pay within the due date may result in penalties, interest surcharges, or even legal action in cases of continued non-compliance.
💬 Public Response and Challenges
While many business owners acknowledge the need for structured taxation, there has been some concern about the burden on small and medium enterprises (SMEs). Freelancers and digital professionals, in particular, are calling for a clearer classification and lower tax thresholds for their sector.
In response, the KP government has assured that it will offer grievance redressal mechanisms and may consider tax rebates or exemptions for startups and women-led businesses in the next phase.
🧮 Final Thoughts
The updated professional tax rates for FY 2025-26 by the KP Excise Department signal a push toward broader tax collection and modernization. While compliance may seem challenging for some, it also opens the door for better infrastructure, public services, and provincial development.
