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Business Recorder
15 hours ago
- Business
- Business Recorder
Budget FY2025-26: Sindh announces to expand sales tax to all major services
The Sindh government has announced to tax 'all services' excluding essential and social services, aiming to 'expand the sales tax base and also reduce possible tariff disputes and litigations', according to budget documents released on Friday. The provincial government announced its budget for the financial year 2025-26 on Friday, with Chief Minister Murad Ali Shah unveiling proposals for Rs3.45 trillion total outlay, with a deficit of Rs38.46 billion. According to Sindh Revenue Board (SRB) website, the general rate of Sindh Sales Tax on services is 15% with the exception of telecommunication services, which are liable to be taxed at 19.5%. Tax is levied at reduced or concessionary rates in certain cases. Sindh budget documents suggest the province is targeting to collect Rs388 billion in provincial sales tax on services and taxes from agriculture in FY26. The province is projected to collect Rs300 billion in Sindh Sales Tax on services in FY25, 35% higher compared to FY24. 'The Sindh Sales tax on services has been the mainstay of provincial revenues,' CM Murad Ali Shah said during his budget speech at the provincial assembly. 'Under the existing law, all major services are taxable and a smaller segment of services is not taxable. This situation creates disputes regarding taxability of services, which leads to unnecessary litigation and also problems for the taxpayers. 'Therefore, the decision is being made to transform to negative list regime by taxing all services but at the same time taking care that essential and social services are kept exempt that a significant part of new services is subjected to reduced rate,' he said. On the other hand, the Sindh government has proposed to completely remove five levies including professional tax, cotton fee, entertainment duty, local cess and drainage cess, according to budget documents. The tax relief measures would 'reduce the financial burden on both individuals and businesses,' Murad Ali Shah speech text read. Sindh govt presents Rs1.02trn Annual Development Programme for FY2025-26 'The professional tax affects salaried people and small businesses. The cotton fee adds cost to the agriculture and textile sectors.' Besides, the yearly tax under the Motor Vehicle Ordinance for commercial vehicle is being reduced to Rs1,000, 'giving relief to transport and goods carriers'. 'There is also a proposal to end the requirement for third party insurance for motorcycle. 'The mutation fee and sales certificate fees are being reduced to Rs500 from Rs1,000,' the chief minister said. According to Sindh Revenue Board (SRB) website, the general rate of Sindh sales tax on services is 15% with the exception of telecommunication services, which are liable to be taxed at 19.5%. Tax is levied at reduced or concessionary rates in certain cases.
Business Recorder
2 days ago
- Business
- Business Recorder
Sindh CM Murad calls pre-budget meeting on June 13
Chief Minister of Sindh Syed Murad has called the provincial cabinet's meeting on Friday, June 13, 2025, to discuss the annual budget for the fiscal year 2025-26, as well as supplementary and development expenditures. According to a notification issued by the Services, General Administration and Coordination Department (Cabinet Section), the meeting, will now be held in the Committee Room of the Chief Minister's Secretariat, Karachi. The meeting's agenda includes confirmation of minutes from previous cabinet and finance committee meetings, presentation of the annual and supplementary budgets, and discussion of the Annual Development Program (ADP) 2025-26. Sindh govt to allocate 'substantial budget' for e-taxis, scooters Key agenda items also include deliberation on the Finance Bill and proposed relief measures, with inputs expected from the heads of departments such as the Board of Revenue, Sindh Revenue Board, Excise, Taxation and Narcotics Control, Local Government, Agriculture, and Irrigation. The Finance Secretary will present the annual and supplementary budgets, while the Chairman of the Planning and Development Board will lead the briefing on the development programme. Sindh govt says will launch new mega projects in upcoming budget All cabinet members, relevant department secretaries, and senior officials have been requested to ensure their presence and come prepared with working papers and presentations, as per the notification signed by Section Officer (Cabinet) Sarang Ali Shaikh. The notification also calls on officials to observe formal dress code and notes that 55 sets of documents must be submitted ahead of the session.
Business Recorder
2 days ago
- Business
- Business Recorder
CM Murad calls pre-budget meeting on June 13
Chief Minister Sindh Syed Murad has called the provincial cabinet's meeting on Friday, June 13, 2025, to discuss the annual budget for the fiscal year 2025-26, as well as supplementary and development expenditures. According to a notification issued by the Services, General Administration and Coordination Department (Cabinet Section), the meeting, will now be held in the Committee Room of the Chief Minister's Secretariat, Karachi. The meeting's agenda includes confirmation of minutes from previous cabinet and finance committee meetings, presentation of the annual and supplementary budgets, and discussion of the Annual Development Program (ADP) 2025-26. Sindh govt to allocate 'substantial budget' for e-taxis, scooters Key agenda items also include deliberation on the Finance Bill and proposed relief measures, with inputs expected from the heads of departments such as the Board of Revenue, Sindh Revenue Board, Excise, Taxation and Narcotics Control, Local Government, Agriculture, and Irrigation. The Finance Secretary will present the annual and supplementary budgets, while the Chairman of the Planning and Development Board will lead the briefing on the development programme. All cabinet members, relevant department secretaries, and senior officials have been requested to ensure their presence and come prepared with working papers and presentations, as per the notification signed by Section Officer (Cabinet) Sarang Ali Shaikh. The notification also calls on officials to observe formal dress code and notes that 55 sets of documents must be submitted ahead of the session.
Business Recorder
6 days ago
- Business
- Business Recorder
Budget FY26: PSX proposes to resolve provincial jurisdiction differences over collection of sales tax on services at CCI
The Pakistan Stock Exchange (PSX) has urged the federal and provincial governments to raise the issue of jurisdiction differences among provinces over the collection of sales tax on services at the Council of Common Interest (CCI), anticipating the credible body would amicably device 'a (revenue) sharing formula for each province' to settle the grave matter of concern. The bourse said that provincial sales tax is applicable on services including fund and assets management. 'The wordings of the laws enacted by the Sindh Revenue Board, Punjab Revenue Authority and Khyber Pakhtunkhwa Revenue Authority are overlapping as the law governing Sindh Sales Tax enacted by Sindh Revenue Board states that sales tax is to be provided where business is registered while Punjab Sales Tax on Services Act, 2012 and Khyber Pakhtunkhwa Finance Act 2013 states that the province where taxable services are provided or rendered by the service provider is entitled to levy, charge and collect sales tax on such services. 'We (PSX) request that this issue, being of equal relevance to all the provinces and affecting the entire services sector, may be placed on the agenda of the Council of Common Interests so that a sharing formula for each province can be devised to resolve this matter,' the set of budget proposals reads,' the bourse statement said. The three provinces collect sales tax on services at the standard rates in the range of 15-16% of the value of the services rendered. But in the case of the telecommunication services, some provinces charge the tax at the rate of 19.5%. The management of the stock market highlighted the issue in its set of budget proposals for FY26 already sent to the Ministry of Finance, as the dispute over collection of the sales tax on services is 'affecting the entire services sector' including the firms listed at PSX. The stock market facilitated trade in shares of around 550 companies having a total market capitalisation of Rs14.73 trillion (around $52 billion, or 12.7% of Pakistan's gross domestic product (GDP) of FY25), it was learnt. Elimination of minimum tax recommended PSX further requested that 'minimum tax regime should be eliminated from listed companies as such companies are strongly compliant towards specific documentation requirements of various statutes'. It elaborated that the minimum tax on listed companies discourages documentation of the economy. Listed firms already meet extensive regulatory requirements, including audits, tax filings, advance tax payments, and withholding statements, ensuring their accounts align with statutory norms and build trust with authorities. 'However, the levy of minimum tax puts a downward impact on the earnings of listed companies despite having current and brought forward losses.' PSX also proposed enhancing tax credit for listed small and medium enterprises (SME), as they contribute immensely to Pakistan's employment, exports and GDP growth, and provide 80% of all employment in the country. 'In order to encourage small and medium enterprises to get listed on the SME Board, it is proposed that the rate of tax for such listed SME companies be permanently lowered by giving tax credit of 50% of tax payable for 3 to 4 years of listing and then onwards 20% of the tax payable,' it proposed. Besides, it requested to align rates of capital gains tax (CGT) on disposal/sale of securities with rates of CGT on sale of immovable property, align rates of CGT for all derivatives and future contracts traded on PSX with future commodity contracts traded on Pakistan Mercantile Exchange (PMEX), document real estate sector and promote Real Estate Investment Trusts (REITs), and proposed tax relief for foreign investment flows at PSX. To encourage more companies to get listed at PSX, it urged the government to expedite digitisation of the payment system and documentation of the economy through deploying the technology, as 'estimates of the cash-based economy range from 35% to 50% of GDP'.
Business Recorder
14-05-2025
- Business
- Business Recorder
POS invoicing: SRB conducts first computerised prize ballot draw
KARACHI: The Sindh Revenue Board (SRB) on Tuesday conducted its first computerised prize ballot draw for customers who verified their invoices from Point of Sale (POS) integrated businesses. The event, held at SRB headquarters, saw 105 lucky winners selected through an automated ballot system. The winners will receive various prizes, including 67 cash awards, for simply verifying the authenticity of their service receipts through official SRB channels. The prize scheme is part of SRB's broader initiative to integrate POS invoicing systems of restaurants, beauty parlors, and gyms with the board's computerised network. This integration enables real-time reporting of transactions and allows customers to verify invoice authenticity by scanning QR codes or checking SRB invoice numbers through the 'eSRB' mobile application or the SRB website. 'This system serves dual purposes - ensuring transparency in tax collection while giving customers peace of mind that their tax payments actually reach government coffers,' SRB said. The initiative, which has reportedly received an enthusiastic response from service recipients, is designed to combat potential tax evasion while incentivizing consumers to demand properly documented transactions. With the successful launch of this first prize draw, SRB officials expressed confidence that more customers will begin requesting POS-integrated invoices and verifying them through official channels. The board believes this customer-driven approach will significantly enhance revenue collection transparency while building public trust in the taxation system. The POS integration scheme was extensively advertised to the public before the draw, helping to generate widespread awareness and participation across Sindh province. Copyright Business Recorder, 2025
