The government of Sindh has levied 13% tax on ride-hailing services like Careem and Uber in Finance Bill 2019-20. The imposition on tax would have adverse effects on the business growth it would also indirectly impact the consumers.
According to the industry experts, the government’s decision would also affect Foreign Direct Investment (FDI) in the province and passively affect the unemployment rate in the region.
Careem and Uber both have significantly cushioned job sector in Pakistan by adding hundred thousands of jobs across Pakistan. The tax will also impact the earnings of drivers which could create dissatisfaction among them. The rising fuel costs have already raised the cost of traveling in Pakistan, further taxation would be a disaster for the country as a whole.
On the other hand, the northern province of KPK has only levied 2% tax on ride-hailing services, the move is welcomed by the companies as well as it will protect the driver’s income, boost FDI, create more jobs, provide sustainable revenue source to the government and provide cost-effective cab services to the consumers. Sindh government should revisit their taxation policy and provide the dormant economy with the opportunity to grow.