Uber and Careem will be imposed with new taxes by the name of “Ride-hailing services tax”, in the upcoming Punjab budget for the year 2018-19. The budget is going to be announced by Punjab Government soon. The tax expected to be applied will be around 5% as reported by The News.
A meeting of resource mobilization committee was held to discuss the upcoming provincial budget and was attended by officials of the government. Punjab Government plans to unveil the budget on 2nd May 2018. There are various taxes to be added especially on service-based businesses. The provincial government won’t be applying any major taxes on the general public.
The list includes the following taxes amending in the upcoming budget of 2018-19:
- Broadcasting services such as ad and broadcasting services including ads in magazine, newspapers, and journals etc.
- Insurance services providers.
- Courier services.
- Ride-hailing services tax.
- Rent-a-car services tax.
- Advertisement services tax.
- Proprietors of vehicles who provide carriage services for rent collection as well as debt collection, and cash collection etc.
The government is also thinking of up-lifting the reduced tax scheme of 5% for standalone marriage halls and caterers and restoring the full tax. Punjab Government plans to exempt the following service providers from any kind of tax:
- Legal experts such as lawyers.
- Maternity homes for the elderly.
- Medical centers as well as clinics.
Punjab government has also done this before and planned to impose the same tax because of the low rates of Careem and Uber rides. The government also tried to ban Uber and Careem many times. Taxes are usually raised in the election year, governments have a strategy to cause inflation by raising taxes for a short time and then to reduce them when the winning government comes to power. Let’s see if this time government will be successful in applying the taxes on Uber and Careem.
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