The Sindh government has announced a substantial sales tax increase for various sectors, effective July 1, to boost revenue for the 2024-25 fiscal year. The sales tax rate has been raised from 13% to 15%, affecting restaurants, cafes, bakeries, marriage halls, hotels, guest houses, farmhouses, cleaners, and other businesses.

However, there is a benefit for debit and credit cardholders. The government has introduced a special incentive for electronic payments, allowing customers to enjoy a reduced sales tax rate of 8% when paying with debit or credit cards, effectively offering them a 7% discount on their bills.

Key Points:

Sales Tax Increase: The Sindh Sales Tax has been increased by 2%, now standing at 15% up from the previous 13%.

Affected Businesses: Restaurants, cafes, bakeries, marriage halls, hotels, guest houses, farmhouses, and cleaners will collect the new tax rate.

Benefit for Card Holders: Payments made via debit or credit cards will incur only an 8% sales tax, providing a substantial benefit.

Implementation: The new tax rate and the benefit for electronic payments have been effective since July 1. The Sindh Revenue Board has made it clear that excuses such as the absence of POS machines or technical errors will not be accepted.

Last month, Chief Minister Murad Ali Shah unveiled a provincial budget of Rs2.244 trillion, which includes a development outlay of Rs410 billion. Addressing the Sindh Assembly, Mr. Shah, who also holds the position of provincial finance minister, expressed pride in presenting the fifth budget of the current government. He highlighted that the budget was the best possible under the circumstances, given the impacts of the global recession, heavy rains, and floods in the country.

This new initiative aims to promote digital transactions while boosting the province’s revenue. Cardholders will benefit significantly from this policy, creating a win-win situation for both the government and consumers.

For further details on how this change might affect you or to understand the full scope of the new tax regulations, stay tuned to official updates from the Sindh Revenue Board.