Sindh Budget 2025: No New ‍Taxes, Focus on Development Despite Funding Issues

Updated ‍June ⁣15, 2025

Karachi—The Sindh government’s budget for 2025-26 avoids new taxes while aiming for increased development ⁤spending, Chief Minister Syed Murad Ali Shah ⁢announced Saturday. Speaking‍ at a press conference, Shah detailed tax reductions and exemptions, particularly for export processing and special economic zones, which are now‍ exempt from services tax.The provincial government aims to play⁣ a key role in boosting ⁢the economy.

Entertainment tax has been abolished, and resturant taxes reduced, Shah said. Stamp duty on third-party‍ vehicle insurance drops to Rs50, ⁣and insurance tax decreases from 15% to 5%, according to‍ the Sindh Finance Bill 2025-26. A list of tax-exempted items will be published to meet IMF ⁢requirements.

The finance bill also ‍exempts⁢ services of parliament and⁤ assembly members, local government representatives, judges, and tribunal⁣ members from sales tax.Construction of houses up ⁤to 10,000⁤ square feet in private residential schemes is tax-exempt, as is health and life insurance⁤ up to Rs500,000. Government-approved universities and colleges will not pay tax ‍on educational research, and haj and Umrah travel operators are also exempt.

However, a 19.5%⁣ tax will apply to‍ vehicle trackers, security cameras, and alarm systems ⁢within security services. Internet, telephone, Wi-Fi,⁢ and broadband connections‍ will also face a 19.5% ‍tax. Vehicle transactions will incur a 3% tax.

Online payments for restaurants, hotels, farmhouses, and beverages will be taxed ‍at 8%. Cab services will pay 5%, while rental car ⁢services and freight vehicles will be taxed at 8%. Hiring armed and security‍ guards will also⁣ incur an 8% tax. Real⁤ estate services face⁣ an⁣ 8% tax,⁣ and foreign exchange services a 3% tax.

Coaching and training centers ⁣will pay 3% tax, as will schools and colleges ⁢with annual fees exceeding⁤ Rs500,000. The chief minister outlined the province’s fiscal and development ⁤agenda, acknowledging financial challenges and federal ⁤funding shortfalls.

Chief Minister opposes Center’s 18% general sales tax on solar panels.
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Shah criticized the federal government for withholding funds. Sindh was informed just before the budget presentation that Rs105 billion in expected⁤ funds ⁢would be ‍withheld. “Sindh has received⁣ Rs1,478.5 billion from the divisible pool since last year, but Rs422.3 billion remains outstanding,”⁢ he said,expressing hope for disbursement by the‍ end of June. The province is taking on a important role in pushing back against federal policies.

The Sindh government will⁤ allocate‍ Rs590 billion for development projects this year,⁣ within a total budget of Rs3.45 trillion—Rs1 trillion for development and Rs2.15 trillion⁢ for current expenditures. Rs1.1⁤ trillion is earmarked for salaries and pensions, leading to salary ⁤increases of 12%⁤ for lower-grade employees and 10% for higher ⁤grades.

Sectoral budget increases include an 18% rise in education funding and an 11% increase in health. Agriculture, irrigation, and local government projects also see significant boosts. the⁢ province is actively playing a role in improving key sectors.

Shah noted 20,000 to⁤ 25,000‍ job vacancies ⁣in Grades 1 to 4, ‍with recruitment planned via IBA-administered tests for Grades‍ BPS-5 to 7 and filling higher⁢ Grade‍ 16 positions.

He expressed concern over ‍the halving of federal funding for the Sukkur-Hyderabad ⁤Motorway, from ⁣Rs30 billion⁣ to Rs15 billion.

Shah emphasized that major projects are excluded from the federal Public Sector Development program (PSDP) and ‍criticized the 18% tax⁢ on solar panels as unjust.He⁣ warned that the Pakistan Peoples Party would not ⁢support‍ the federal