KARACHI: In the face of criticism over the budgetary proposal to impose sales tax on the services of educational institutions, hospitals and doctors, the Sindh government said on Sunday that a reduced rate of 3 per cent was proposed for specific services within these sectors.

In a statement, the Sindh Revenue Board (SRB) clarified what it called “reports ... that the Sindh government has imposed, through the Sindh Finance Bill, 2024, Sindh Sales Tax (SST) at the standard rate of 15 per cent on the services of hospitals, medical practitioners (doctors) and educational institutions.

“The Finance Bill specifies the standard rate (15pc) of SST as a scheme of specifying the taxable services. However, the effective rates (reduced rates, if any, as per the government decision) are published in the gazette notifications separately.”

The statement said that the Sindh Finance Bill, 2024 does not immediately impose a 15pc SST on health and education services, rather it outlines the standard rate framework.

However, specific services within the health and education sectors, as approved by the Sindh cabinet, are proposed to be subjected to taxation at the reduced rate of 3pc.

“The reduced rates applicable to taxable services, including health and education services, will be formally notified as soon as the Bill becomes an Act of the Provincial Assembly of Sindh,” the SRB statement added.

The introduction of any tax measures was aimed at supporting sustainable funding for health and education sectors while considering the impact on stakeholders, it said.

Meanwhile, the All Sindh Parents Association (ASPA) demanded that the government immediately remove the proposed taxes on education services and stationary items.

In a statement posted on its Facebook page, the ASPA said that the government proposed 15pc sales tax on educational services and 10pc tax on stationary items — pencil, copies, paper, rubber, sharpeners, pen, books, newsprint, etc.

“The decision has a direct impact on the parents’ community, which is already overburdened by heavy school fees and other charges,” it said.

Published in Dawn, June 17th, 2024