Sindh Revenue Board clarifies service tax on card payments at restaurants remains at 8%

Earlier reports suggested the Sindh government had reinstated a 15% service tax on card payments


News Desk July 23, 2024

The Sindh Revenue Board has refuted reports claiming a 15% service sales tax on debit and credit card payments for restaurant bills.

A spokesperson from the Sindh Revenue Board confirmed that the service sales tax for payments made via debit and credit cards at hotels and restaurants remains at 8%.

Under the Sindh Finance Act, a 15% service sales tax is levied on cash payments for restaurant bills. However, if the payment is made using a debit or credit card, the service tax is reduced to 8%.

Earlier reports suggested the Sindh government had reinstated a 15% service tax on card payments at restaurants and hotels, reversing an earlier reduction to 8%. This misinformation has now been clarified by the board.

The Sindh Revenue Board also stated that 58 establishments in Karachi are authorised to apply the 8% tax rate. This adjustment aims to encourage digital transactions and ensure compliance within the hospitality sector.

The service tax on card payments remains a critical revenue source, reflecting the government's commitment to balancing the provincial budget and addressing revenue shortfalls.

The actual impact of this tax policy on restaurant sales and revenue will be monitored in the coming months. Further evaluations of tax compliance and revenue outcomes are planned by the Sindh Revenue Board.

COMMENTS (3)

Faisal Younus | 3 months ago | Reply Childish tax impose on card payment most of the restaurants and hotel do not accept cards by doing this they will encourage customers to avoid payment through cards. Right now we need documented economy and these kind and of taxes will put us more behind than at what point right now.
John Doe | 3 months ago | Reply What s the point of this clarification when the SRB has itself authorized every Tom Dick Harry to collect tax @ 15 through a separate approval which is available with every restaurant now
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