Sindh Govt Increases Sales Tax to 15%

The Sindh government has raised the provincial sales tax on services to 15 percent, effective July 1. The expected revenue impact from this hike is estimated to be Rs. 120 billion, bringing the total sales tax collection to Rs. 350 billion in fiscal year 2024-25. Professional tax on personal income and some services has been increased by 300 percent, now set at Rs. 2,000 per year. Meanwhile, taxes on imported and locally manufactured vehicles have gone up to Rs. 450,000 per unit. The professional tax on petrol pumps and CNG stations has increased to Rs. 20,000, while tax on domestic air tickets is now Rs. 2,500 and Rs. 1,000 for international travel. Taxes on digital services, including restaurants and telecom services, have been reduced. Sindh’s budget for 2024-25 projects total expenditures and resource mobilization at Rs. 3.06 trillion, with provincial tax collection at Rs. 662 billion. Other changes include reducing the Sindh sales tax rate to 8 percent for digital payments in restaurants and allowing telecom services an input tax credit of up to 18 percent. Revenue from excise and taxation proposals is expected to generate Rs. 35.90 billion annually. Luxury tax on imported cars and Infrastructure Development Cess rates have also been revised, with significant increases in professional tax and transfer fees for vehicles.