Govt Likely to Impose Sales Tax on Ride-Hailing Services in Upcoming Budget

The federal government is reportedly planning to impose a 4% sales tax on ride-hailing services operating within Islamabad as part of the upcoming fiscal year 2025–26 (FY26) budget.

Sources familiar with the matter revealed to ProPakistani (An authentic news source of Pakistani digital media) that the Federal Board of Revenue (FBR) is actively considering a proposal to introduce the tax on cab aggregators specifically within the Islamabad Capital Territory. If approved, this would mark the first time such services are taxed in the federal capital.

Currently, no federal sales tax is levied on ride-hailing platforms in Islamabad. However, provincial revenue authorities such as the Punjab Revenue Authority, Sindh Revenue Board, and KP Revenue Authority already apply a 5% sales tax on similar services within their respective jurisdictions.

According to insiders, the FBR had previously floated the idea during the FY25 budget cycle, but it was dropped from the finance bill at the last minute.

Pakistan’s ride-hailing market is highly competitive, with services like InDrive, Careem, Bykea, Jugnoo, and Yango catering to urban mobility needs. Notably, InDrive holds a dominant 60% market share among ride-hailing platforms across the country.

If implemented, the tax could impact fare structures and commission models for operators and drivers, potentially reshaping consumer pricing and service competition in Islamabad.

Source: ProPakistani