KARACHI – The Sindh government has doubled the service tax on payments at various restaurants and cafes through debit and credit cards in a bid to generate more revenue.
Lately, the provincial government had decreased the tax on payments through debit or credit cards to eight percent as apparently it aimed at promoting online payments and discouraging cash transactions.
In latest development, the service tax has been increased to 15% again. The government has directed the authorised 58 restaurants and cafes to collect the tax in line with new rate.
Reports said the Sindh government has restored the previous tax rate to tackle the revenue shortfall and generate more income from the hospitality sector.
The hike in service tax on payments through bank cards is expected to decrease the sales of the restaurants and cafes in the province.
Tax collection on card payments is considered one of the major contributors to the overall revenue generated by the provincial government.
