Karachi, June 17, 2025 – The Sindh government has officially presented the Sindh Finance Bill 2025, proposing a wide array of structural amendments to the Sindh Sales Tax on Services Act, 2011.
The newly introduced bill emphasizes tax compliance, broadens the taxable base, and aligns with international classification standards, reflecting the province’s strategy to enhance revenue and simplify tax administration.
One of the most notable features of the Finance Bill is the introduction of a comprehensive negative list. Under this framework, all services provided within Sindh will be considered taxable unless they are explicitly exempted by this negative list. This marks a major shift from the earlier service-specific taxation regime to a broader, more inclusive tax framework.
The Finance Bill 2025 also significantly expands the definition of the term “service.” It now includes any activity, facility, utility, benefit, or advantage—whether tangible or intangible—including the assignment or surrender of any rights. This redefinition is expected to reduce ambiguity and ensure a more comprehensive capture of taxable services within Sindh.
In a move to align with international standards, the Finance Bill shifts the classification of taxable services from the outdated Federal Excise Act, 2005 and Chapter 98 of the Pakistan Customs Tariff to the United Nations Central Product Classification (CPC) Version 2.1. Additionally, all service definitions previously included in the Act have now been omitted to simplify legislative language.
A critical change introduced in the Sindh Finance Bill 2025 pertains to services provided by non-resident persons. Previously, only services linked to a “registered office” were taxed. Now, the term “registered office” has been replaced with “office,” implying that any office operating within Sindh, even if it’s not the principal registered one, will fall under the purview of Sindh Sales Tax on Services (SST).
Furthermore, issuance or renewal of licenses and permissions will now be dependent on the applicant’s status as an active, registered taxpayer. Earlier, only proof of registration was required.
Finally, the Finance Bill confirms that all services currently subject to tax will continue to be taxed at the rates prevailing as of June 30, 2025.
These sweeping changes underline the Sindh government’s commitment to enhancing tax transparency, enforcement, and fiscal autonomy.