The federal government is reportedly considering a 4 percent sales tax on ride-hailing services operating within Islamabad Capital Territory as part of the upcoming FY26 federal budget. Sources told ProPakistani that the Federal Board of Revenue (FBR) has revived its earlier proposal, which was dropped at the last minute in the current year’s finance bill, and is likely to implement it in the next fiscal cycle.
Currently, ride-hailing services in Islamabad such as InDrive, Careem, Bykea, Jugnoo, and Yango are not subject to federal sales tax. However, in other regions like Punjab, Sindh, and Khyber Pakhtunkhwa, provincial authorities already levy a 5 percent sales tax on such services. The absence of a unified tax structure has created disparities in pricing and regulatory compliance across cities.
If approved, the new tax would specifically apply to CAB aggregators operating in the federal capital, potentially increasing fare costs for passengers and service charges for drivers. InDrive, which holds a 60 percent share in Pakistan’s ride-hailing market, could see the most significant impact, alongside other major platforms like Careem and Bykea.
Experts believe the move could generate substantial revenue for the FBR but may also raise concerns among users and drivers over rising costs and reduced earnings. The proposal is expected to be tabled in the budget session and could become official policy starting July 2025 if passed by parliament.
As Pakistan’s digital transport ecosystem continues to expand, the introduction of this tax could mark a major policy shift in how ride-hailing services are regulated at the federal level.
