Ride-Hailing Industry Urges Government for Fairer Taxation in Upcoming Budget

The current one-size-fits-all tax model

is stifling innovation and fair

competition, industry stakeholders argue

Business Reporter

Karachi: As Pakistan prepares its fiscal budget, industry leaders are calling on the federal government to introduce a progressive and equitable taxation policy for the rapidly growing ride-hailing sector.

With rising urbanization, limited public transportation, increasing fuel prices, and worsening traffic congestion, ride-hailing platforms have become a vital mode of transport for millions across the country. However, industry stakeholders argue that the current one-size-fits-all tax model is stifling innovation and fair competition.

Anton Ambrose, Head of Public Policy and Regulatory Affairs for inDrive in the Asia-Pacific region, highlighted the disparities in the existing tax structure. “It’s concerning that platforms charging drivers as little as 10% commission are taxed at the same rate as those taking up to 25%,” he said.

Proposal for Tiered Tax System

To encourage affordability and support both drivers and passengers, Ambrose proposed a tiered taxation system for ride-hailing platforms in the new budget:

• Platforms with commissions under 11%: Fully exempt from service tax
• Commissions between 11% and 15%: Taxed at 5%
• Commissions over 15%: Taxed at 15% or higher

“This model supports fairness and affordability,” Ambrose explained. “Lower taxes on platforms with smaller commissions will directly benefit drivers and reduce fares for users—especially low-income groups—leading to increased demand and, ultimately, greater tax revenue for the government.”

Call for GST Exemption on Ride-Hailing

Ambrose also urged policymakers to exempt ride-hailing services from General Sales Tax (GST), categorizing them as essential services rather than luxuries.

“In a country like Pakistan, where public transport options are limited and safety concerns are prevalent, ride-hailing isn’t a privilege—it’s a necessity,” he said.

A Growing Sector with Economic Potential

With the ride-hailing industry continuing to expand, stakeholders believe that tax reforms can unlock further growth, support economic inclusion, and improve urban mobility.