Karachi, June 16, 2024 – The Sindh Revenue Board (SRB) has addressed recent reports regarding the implementation of a 15 percent sales tax on health and education services in Sindh, effective from the next fiscal year.
The SRB clarified that certain media outlets had incorrectly reported that the Sindh government, through the Sindh Finance Bill, 2024, was imposing a standard rate of 15 percent Sindh Sales Tax (SST) on services provided by hospitals, medical practitioners, and educational institutions.
In a statement, the SRB explained that while the Finance Bill specifies a standard rate of 15 percent SST as a framework for taxable services, this does not immediately apply to all services. “The effective rates, including any reduced rates determined by the government, are published separately in gazette notifications,” the SRB emphasized.
Further clarifying the matter, the SRB noted that the Finance Bill, 2024 does not instantaneously enforce a 15 percent SST on health and education services. Instead, it outlines a standard rate framework, with the intention of subjecting specific services within these sectors to a significantly reduced tax rate. “Services in the health and education sectors, as approved by the Sindh Cabinet, are proposed to be taxed at a reduced rate of 3 percent,” the SRB stated.
The SRB assured that the reduced rates for taxable services, including those in the health and education sectors, will be formally announced once the Bill is enacted by the Provincial Assembly of Sindh.
The government of Sindh reiterated its commitment to maintaining accessible and affordable health and education services for all residents. “Any tax measures introduced aim to ensure sustainable funding for these crucial sectors while considering the potential impact on stakeholders,” the SRB highlighted.
This clarification comes amidst concerns from various sectors about the financial burden a higher tax rate might impose on essential services. The SRB’s assurance of reduced rates aims to alleviate these concerns and underscore the government’s focus on balanced and equitable taxation policies.
As the Sindh Finance Bill, 2024 moves forward, stakeholders are advised to await the official gazette notifications for precise details on the applicable tax rates for different services.
