Effective immediately, the Sindh government has implemented a 2% increase in the Sales Tax on various services, impacting several sectors significantly. Notably, the Sindh Sales Tax (SST) rate for businesses such as hotels, farmhouses, restaurants, caterers, and wedding halls has risen from 13% to 15%. Additionally, guest houses, farmhouses, clubs, and other entities will also face higher SST rates due to these adjustments.
These fiscal measures are part of the new financial strategy for the fiscal year 2024-25, aimed at expanding revenue through an extended coverage of the General Sales Tax (GST) across more service sectors. Alongside these changes, the government has introduced new taxes on both domestic and international air tickets. Consequently, travelers booking flights, whether within Pakistan or to international destinations, will incur additional expenses.
While these reforms are intended to bolster government revenue streams, they are expected to have widespread implications. Businesses in the hospitality and service industries, including hotels and restaurants, will likely need to adjust their pricing structures to accommodate the higher tax rates. This adjustment may result in increased costs for consumers seeking these services. Similarly, travelers can anticipate higher overall expenses due to the newly imposed taxes on air travel.
Overall, these fiscal adjustments represent a significant policy shift aimed at enhancing revenue collection but may pose financial challenges for businesses and consumers alike in Sindh.