Advertisements in newspapers, periodicals: SRB imposes 3 percent sales tax

The Sindh government has imposed 3 percent sales tax on the advertisements in newspapers and periodicals from July 1, 2019. According to a notification issued by Sindh Revenue Board (SRB), the Sindh government has amended the rule 34 of Sindh Sales Tax on Services Rules, 2011 and added advertisements in newspapers and periodicals to the rule to impose a 3 percent sales tax on services. "In the title of the rule, after the words "vehicle, etc.", the comma and words ", and advertisements in newspapers and periodicals" shall be added;"
Similarly, the KPK government has also imposed a 4-5 percent sales tax on services on the advertisements in newspapers and periodicals from fiscal year 2019-20. Talking to Business Recorder, Adnan Mufti, partner, Shekha & Mufti Charter Accountants, said the Sindh government has imposed a 3 percent sales tax on services on the colour and black and white advertisements published in newspapers and periodicals from July 1, 2019.
Moreover, he said that SRB, which collected 13 percent sales tax on services on the advertisements transmitted through web, SMS and any telecommunication or digital media, has now extended the scope of sales tax on services to the advertisements in newspapers and periodicals and imposed reduced rate of sales tax (3 percent) on services. Mufti said that Musharika and Modarba financing, which were earlier exempted from tax to promote Islamic banking, have now come into provincial tax ambit.
Replying to a question, he said that Musharika and Modarba financing, Umrah and Hajj services and the services of cheque book issuance are now subjected to 13 percent sales tax on services from July 1, 2019, although Musharika and Modarba financing are not services and termed the imposition of tax on these Islamic financing as a discriminative act by the Sindh government.
Furthermore, he said that insurance policies are investments not services but the Sindh government has imposed the sales tax on services on insurance policies from July 1, 2019, which he termed unjustified and against the law.
Correspondingly, the rate of sales tax on services on the accounting firms has increased from 8 percent to 13 percent on the services except tax consultancy; he said and urged the SRB to look into the matter.