The Sindh government has announced an increase in the provincial sales tax on services to 15 percent, effective from July 1. This hike is expected to generate an additional Rs. 120 billion, raising the total sales tax collection to Rs. 350 billion for the fiscal year 2024-25.
In addition to this, the professional tax on personal income and certain services has been increased by 300 percent, now amounting to Rs. 2,000 per year. Taxes on both imported and locally manufactured vehicles have been raised to Rs. 450,000 per unit. The professional tax on petrol pumps and CNG stations has been increased to Rs. 20,000, while domestic air travel is now taxed at Rs. 2,500 and international travel at Rs. 1,000. However, taxes on digital services, including those provided by restaurants and telecom companies, have been reduced.
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Sindh’s budget for 2024-25 projects total expenditures and resource mobilization at Rs. 3.06 trillion, with a provincial tax collection target of Rs. 662 billion.
Further changes include a reduction in the Sindh sales tax rate to 8 percent for digital payments in restaurants and an allowance for telecom services to claim an input tax credit of up to 18 percent. Revenue from excise and taxation measures is anticipated to bring in Rs. 35.90 billion annually. There have also been significant increases in professional tax and transfer fees for vehicles, alongside revisions to the luxury tax on imported cars and Infrastructure Development Cess rates.
