The Karachi Metropolitan Corporation (KMC) has finalized preparations to introduce a new tax on the city’s hospitality and event sector, including hotels, guest houses, marriage halls, marquees, banquet facilities, and Airbnb-style accommodations.
Under the proposed plan, a 1 percent levy would be charged on total billing across hotels, lodges, guest houses, wedding venues, and short-term rental services. The tax is being introduced under a new category titled “Entertainment Tax – City Tourism and Hospitality.”
KMC has opened the proposal for public input and objections, with a hearing scheduled for June 10 at its head office. According to officials, the feedback process will be completed before final approval is considered in the upcoming municipal budget.
The municipal administration says the measure is aimed at strengthening revenue collection and improving services linked to tourism and urban hospitality management in Karachi.
The proposal has been drafted under powers granted by the Sindh Local Government Act 2013, which allows local bodies to impose taxes, fees, and other charges.
The plan has already triggered political debate within the City Council. Opposition members, including representatives from Jamaat-e-Islami, PTI-backed groups, and others, are reportedly reviewing the proposal and preparing their response.
However, sources indicate that the ruling Pakistan Peoples Party may have enough support in the council to pass the measure if it is put to a vote.
If approved, the new tax will be included in the next municipal budget and could come into effect in the upcoming fiscal year, increasing costs across Karachi’s hospitality, wedding, and short-term rental sectors.
