Finance Act 2026 extends sales tax exemption to reinsurance services for crop and export-related marine insurance from 1 July 2026.

KARACHI: The Sindh government has exempted sales tax on reinsurance services related to crop insurance and export marine insurance under the Sindh Finance Act, 2026, a move aimed at supporting the agriculture sector and easing the tax burden on exporters.

The exemption has been introduced through amendments to the Sindh Sales Tax on Services Act, 2011, with the Sindh Revenue Board (SRB) granting relief on specified reinsurance services.

Under the amended law, sales tax will no longer apply to reinsurance services provided in relation to crop insurance, reducing the overall cost of insurance coverage for farmers and agricultural businesses.

The exemption also covers reinsurance services associated with marine insurance for exports, providing tax relief to exporters by lowering the cost of insurance-related services linked to international trade.

According to the amendment, the exemption came into effect on 1 July 2026.

Tax experts believe the measure will encourage wider adoption of crop insurance by making insurance products more affordable for the agricultural sector, which remains vulnerable to climate-related risks and natural disasters.

They also noted that the exemption on marine insurance reinsurance services is expected to improve the competitiveness of Pakistani exporters by reducing insurance costs associated with export shipments.

The tax relief forms part of the broader package of fiscal measures introduced through the Sindh Finance Act, 2026, which seeks to promote priority sectors of the provincial economy through targeted tax incentives and support sustainable economic growth.