Pakistan’s ride-hailing industry has appealed to the government for a fair and progressive taxation system in the forthcoming fiscal budget, emphasizing the role these services play in filling the public transport gap in urban areas.
As cities continue to grow and public transport remains underdeveloped, ride-hailing platforms have emerged as a critical mobility option for millions. However, industry leaders argue that the current one-size-fits-all service tax policy is slowing innovation and penalizing low-commission platforms.
Anton Ambrose, Head of Public Policy and Regulatory Affairs for inDrive in the Asia-Pacific, highlighted disparities in the existing tax regime. “It’s concerning that platforms charging drivers as little as 10% commission are taxed at the same rate as those charging 25% or more,” he stated.
To address this, Ambrose proposed a tiered tax structure. Under his recommendation, platforms with commissions below 11% would be exempt from service tax entirely. Those falling between 11% and 15% would be taxed at 5%, while companies charging above 15% would be placed in a higher tax bracket of 15% or more.
Industry representatives believe that adopting such a model would support smaller and fairer operators, ultimately benefiting both drivers and commuters by encouraging competition and affordability.
