KARACHI: The Sindh government is going to reduce the rate of sales tax on services from 15 percent to 14 percent with an aim to move towards uniform rate of taxation, it is learnt.
The tax on telecommunication sector will be reduced from 19.5 percent to 18 percent and there will also be reduction in rate for program producers from 10 percent to 6 percent
The construction and building industry will be given the option of selecting between higher rate of 14 percent with input adjustments and lower rate without input adjustments on a financial year basis, well-placed sources confided to Customs Today.
While the education and medical services have been exempted from sales tax on services, the advertisements in newspapers will also be exempted from any kind of services tax, sources added.
Moreover, in order to achieve tax target for the upcoming years, the Sindh Revenue Board will broaden the tax net by bringing those services in the tax net that have not been taxed up till now, sources said.
In this context following categories of services will start to be taxed from the next FY 2015-16 and they are: Travel Agents at 10pc (Fed 16 pc, Punjab 16pc, KPK 15pc); Credit rating agencies at 14pc (Punjab 16pc); Underwriters at 14pc (Punjab 16 percent); Indenters at 14pc (Punjab 16pc); Commission Agents at 14pc (Punjab 16pc); Auctioneers at 14pc (Punjab 16pc); Dredging and Desilting at 10pc (Punjab 16pc); Copyright or Intellectual property right services at 10pc (Punjab 16pc); Technical inspection and certification services, quality control and testing and erection services at 14pc (Fed 16pc Punjab 16pc); Packers and Mover Services at 14pc (Fed 16pc); Services of Shares/Derivatives/ Reg/Trf/ Custodianship at 14pc (Fed 16pc) Valuation services at 14pc (Fed 16pc); Services by labs (other than the labs doing pathological/medical diagnostic tests for patients) at 14pc (Fed 16pc); Utility bill collection by banks and Nadra at 14pc (Fed 16pc); Renting of commercial property at 6pc and Ready Mix Concrete Services at 14pc or 6pc service provider option.
