KMC plans new entertainment tax on hotels, marriage halls and hospitality sector

KARACHI: The Karachi Metropolitan Corporation (KMC) is preparing to introduce a new “entertainment tax” targeting hotels, guest houses, lodges, marriage halls, marquees, marriage lawns, Airbnbs and banquet facilities, officials said.

Under the proposed plan, a 1% tax will be levied on bills generated by these establishments. The initiative is expected to be included in the KMC’s upcoming budget for the next fiscal year.

According to officials, the proposal is aimed at strengthening the financial position of the city’s tourism and municipal services sector and improving service delivery.

KMC Municipal Commissioner Abrar Jafar has invited public feedback on the proposed tax, with a hearing on objections scheduled for June 10 at the KMC office.

He said the new tax item titled “Entertainment Tax – City Tourism and Hospitality” along with its bylaws is being incorporated under the existing tax framework.

The commissioner noted that under the Sindh Local Government Act 2013, KMC is empowered to impose taxes, fees and tolls.

Meanwhile, sources said opposition members in the City Council  including Jamaat-e-Islami, PTI and others  have begun consultations on the proposal and are expected to present their stance soon.

However, officials suggest that even if the opposition rejects the plan, the Pakistan Peoples Party (PPP), holding a majority in the council, may push the legislation through, paving the way for its implementation in the next fiscal year.