Ride-hailing sector calls for fair taxation

KARACHI: Ride-hailing sector has called for fair and progressive taxation framework in the coming fiscal budget. Amid the country’s growing urban population, a lack of adequate public transport, rising fuel costs, traffic congestion, and parking challenges, ride-hailing services have seen substantial growth in recent years.

Despite this progress, industry experts argue that the current uniform service tax is hindering further expansion.

“It’s concerning that platforms charging drivers commissions as low as 10% are subjected to the same service tax rates as those taking up to 25%,” said Anton Ambrose, Head of Public Policy and Regulatory Affairs for inDrive in the Asia-Pacific region.

Ambrose proposed a tiered taxation model in the upcoming budget. “Platforms that charge less than 11% commission should be completely exempt from service tax,” he recommended.

“Those with commission rates between 11% and 15% could be taxed at 5%, while platforms exceeding 15% commission should fall into the 15% or higher tax bracket.”