There had been a lot of misconceptions regarding the new budget 2019-2020, with a slew of taxes being presented to people of Pakistan and not many were happy at this. One of these taxes was on the ride hailing services that was intitially 13pc and was to gradually increase to 26 pc without formal notice. However, the Sindh Revenue Board (SRB) clarified that with the new budget now in place the sale tax is fixed at 5pc, not more, not less. ride hailing services
According to SRB:
“Although the services of cab aggregators and cab drivers related thereto compete with such rent-a-car services or radio cab services, the former remained outside the tax net on one pretext or the other causing discriminatory tax disadvantage to their competitors. There is no force in the argument that tax advantage be provided to taxi services based on online market platform on the ground that it provides employment to general public.”
A reduced sales tax of 5 percent on every component including rent-a-car services, ride-hailing services, radio taxis and all other related services was imposed to decrease the disadvantage of some and stabilize the taxation in this sector according to a symmetrical taxation system, which until now had not been present causing a lot of irregularities in the taxation by such companies which meant that there was no cap on how costly the rides would be. However, this all is now meant to change so that no ride service can exploit private taxes and every company remains under the umbrella of the new taxation system fixed at 5pc. In other there have been similar taxes imposed with the likes of India, Australia and other EU countries which have formulated a single taxation system for these rides and none of the partners are allowed to change it.