Sindh Chief Minister Syed Murad Ali Shah has announced an ambitious set of relief measures as part of its Budget Estimates for the fiscal year 2025–26, aimed at boosting economic activity, supporting struggling sectors, and easing the burden on the general public.
In addition to relief proposed under the Finance Bill, several key concessions have already been finalised via notifications and amendments to existing rules and laws. The measures span tax and non-tax areas, targeting sectors including agriculture, transport, health, education, and small businesses.
Relief Measures:
Agriculture Sector Relief
• Abolition of Cotton Fee: Following a sharp 30.7% decline in cotton production and sluggish agriculture growth (0.56%), the cotton fee has been abolished to support farmers.
• Abolition of Drainage Cess: To mitigate the impact of adverse weather and reduced cultivation, the government has eliminated the drainage cess. Major crop yields such as wheat (-8.9%), sugarcane (-3.9%), maize (-15.4%), and rice (-1.4%) have all seen significant drops this year.
50 per cent Reduction in Various Revenue Charges:
• Mutation Fee
• Certified Copies
• Sales Certificate
• Solvency Certificate
• Heirship Certificate
Flat Annual Tax for Commercial Vehicles
• The yearly tax for commercial vehicles has been slashed to just Rs. 1,000, providing major relief to transporters and logistics operators.
Major Legislative Reforms Under Finance Bill 2025–26: The chief minister proposed amendments or repeal of seven relevant laws, which the assembly approved. They include:
1. Stamp Act, 1899
2. Motor Vehicles Act, 1939
3. Sindh Entertainment Duty Act, 1958 (Repealed)
4. Sindh Motor Vehicle Taxation Act, 1958
5. Sindh Finance Act, 1964 – Section 11 (Professional Tax Abolished)
6. Sindh Sales Tax on Services Act, 2011
7. Sindh Local Government Act, 2013 – Section 95 (Local Cess Abolished)
Measures for direct public benefit:
• Stamp Duty Reduced: Stamp duty on third-party motor insurance is now just Rs. 50.
• Motorcycle Insurance Exemption: Two-wheeler vehicles are exempted from the mandatory insurance requirement from FY 2025–26.
• Entertainment Duty Abolished: The entire sector, including cinemas, drama theatres, art councils, water parks, and cultural events, will now be tax-free, promoting affordable leisure and cultural enrichment.
Major Reductions in Motor Vehicle and Professional Taxes
• Motor Vehicle Tax for Commercial Vehicles: Brought down to Rs. 1,000 per year, easing operational costs for goods transporters and public transport providers.
• Professional Tax Abolished: A wide range of professionals and businesses will benefit from the Rs. 5 billion relief, including:
o Government and private sector employees
o Educational and medical institutions
o Bakeries, jewellers, transporters, clinics, salons, and more
Sindh Sales Tax (SST) Reforms: Sindh Chief Chief Minister Syed Murad Ali Shah said that under commitments made in the National Fiscal Pact (NFP) 2024 with the Federal Government and the IMF’s Extended Fund Facility, Sindh is transitioning from a Positive List regime to a Negative List – meaning all services will be taxable unless specifically exempt.
Newly Exempt Services (Negative List Includes):
• Passenger transport (road)
• Social care services
• Libraries, archives, and news agencies
• Cleaning services
• Agricultural storage and insurance
• Property leasing for religious/agricultural use
• Veterinary and R&D services
Reduced Rates for Key Services:
• Online taxi services: 5%
• Bus station services: 5%
• Insurance (motor vehicles): 5%
• Educational services (above Rs. 500,000 per student): 3%
• Healthcare (above Rs. 3,000 per session): 3%
• Freight transport services: 8% (3% for specific goods)
Exemption Threshold Raised for Small Businesses:
• Sales tax exemption now applies to businesses with an annual turnover below Rs. 4 million.
• Restaurants and caterers’ exemption threshold increased from Rs. 2.5 million to Rs. 5 million, providing Rs. 400 million relief annually.
Reduction in SST Rate from 10% to 8% for several service sectors, benefiting:
• Beauty parlors
• Security services
• Franchise/IPR services
• Sports centers
• Janitorial services
Third-Party Motor Insurance Tax Slashed: From 15% to 5% to encourage broader insurance coverage.
Support for Farmers and Growers
• Local Cess Abolished: Eliminating this tax under the Sindh Local Government Act will lower production costs and improve agricultural profitability.
Chief Minister Murad Ali Shah said that these sweeping relief measures by the Sindh Government signal a pro-growth, pro-people fiscal policy, prioritising economic stimulation, reduction of regressive taxes, and empowerment of key sectors such as agriculture, transport, and small enterprises. “The 2025–26 budget is being seen as a crucial step toward resilience, equity, and sustainable development in the province,” he concluded.
