Karachi, June 18, 2025 – The Sindh government has widened the scope of sales tax by bringing several new services under the tax net for the fiscal year 2025-26.
This move, introduced through the Sindh Finance Bill 2025, is aimed at increasing provincial revenue and improving tax compliance across sectors that were previously untaxed or under-taxed.
By expanding the sales tax base, the Sindh government expects to collect more from the growing services economy. The newly included services span multiple sectors such as real estate, transportation, information technology, broadcasting, manufacturing, and entertainment.
Among the major additions are services like bus station operations, highway and tunnel management, and real estate rentals involving owned or leased property, all of which will now be taxed at 5% or 3%. The government has also added licensing, IT consulting, IT support, hosting, and network management services to the list at a rate of 3%. Publishing, printing, and reproduction services are now subject to 5% sales tax as well.
In a move to tax more specialized sectors, Sindh has included historical restoration and architectural design services, as well as radio and TV broadcasting and audio-visual production, at a rate of 8%. Moulding and manufacturing-related services, such as plastic and metal casting and stamping, are also included in the 8% tax bracket.
The province has also focused on the entertainment and leisure industry. Recreational sports services and amusement park entries are now taxable, with race club entries taxed at Rs. 200 per person. Other miscellaneous services, including those not explicitly categorized, are now subject to a 5% tax.
Installation services linked to construction (CPC Code 546) and advertising commission-based services (CPC Code 83631) will be taxed at the highest rate of 15%.
This broadening of the tax base reflects Sindh’s strategy to improve revenue generation without increasing the tax burden on traditional sectors. Experts believe that by targeting emerging and under-regulated services, the Sindh government is aligning with global best practices to enhance its tax-to-GDP ratio.
The move has stirred mixed reactions, with industry observers awaiting implementation details and compliance mechanisms to assess its true impact on businesses and consumers in Sindh.