ISLAMABAD: Popular ride-hailing services such as Careem, InDrive, and Yango may soon become more expensive for commuters in the federal capital, as the government plans to impose a 4% sales tax in the upcoming 2025–26 federal budget.
At present, companies like InDrive and Yango are not subject to sales tax in the Islamabad Capital Territory. However, the Federal Board of Revenue (FBR) is finalizing proposals aimed at expanding the tax base and boosting revenue collection. Officials noted that while a similar tax was suggested in last year’s budget, it was eventually dropped.
If the new tax is approved, it will bring Islamabad in line with provinces like Punjab and Sindh, where a 5% sales tax already applies to ride-hailing services.The proposed tax is likely to affect passengers, drivers, and ride-hailing companies. For passengers, the most noticeable change would be higher fares, as companies are expected to pass the extra cost onto users. This could make daily rides more expensive and push some people to use public transport instead.
Ride-hailing companies may also face higher running costs. To avoid raising fares too much and losing customers, they might cut back on special offers or reduce driver bonuses, which could lower service quality.
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According to market experts drivers could earn less if ride requests drop due to higher prices. Their income might also be affected if companies change how they pay bonuses or commissions.
The government says the purpose of this tax is to bring federal rules in line with provincial ones and to increase revenue.
Right now, the plan is still being discussed, and a final decision will be made during the upcoming budget meetings.
