The Sindh Assembly on June 26, 2019, passed the budget for the financial year 2019-20. According to the Sindh Finance Bill, 2019, a new section 19A is added in the Sindh Sales Tax on Services Act, 2011. The section defines the term ‘cab aggregator’ as follows:
(19A) cab aggregator means a person who is an aggregator or operator or intermediary or online marketplace who canvasses or solicits or facilitates passengers for travel by motor vehicles like taxi, cab, car, van, motorcycle and rickshaw, and who connects the passenger or the intending passenger to a driver of any of the aforesaid motor vehicles through telephone, cellular phone, internet, web-based services or GPS or GPRS-based services, electronic or digital means, whether or not he charges or collects any fee, fare, commission, brokerage or other charges or consideration for providing or rendering such services;
Effective July 01, 2019, the Sindh Government has imposed a five percent sales tax on the services rendered by cab aggregators. Careem and Uber have implemented this new Sales Tax on Services in Sindh. Below is an excerpt from the emails sent by Careem Pakistan to their customers:
As per the recent Sindh Finance Act 2019 by the Government of Sindh, a Sales Tax on Services of 5% is now being charged on all cab-aggregators, including Careem, effective July 1, 2019.
This is now being added to your fare and will be visible on your receipt.
According to Careem, the tax applies to all car types, applicable to rides with pickup locations in Sindh. It is, however, not applicable to inter-city rides booked from outside Sindh.