The Karachi Metropolitan Corporation (KMC) is considering the introduction of a new entertainment tax targeting a wide range of hospitality and event-related businesses, including Airbnb properties, hotels, restaurants, guest houses, marriage halls, marquees, wedding lawns, and banquet facilities.

According to officials, the proposed tax would be levied at a rate of one percent of the total bill generated by businesses operating within Karachi’s jurisdiction. The move is part of KMC’s efforts to increase municipal revenue and strengthen the city’s financial resources.

Authorities estimate that the proposed levy could generate around Rs1 billion annually, providing additional funds for civic services, infrastructure development, and municipal operations. The proposal is expected to be included in KMC’s upcoming budget for the next financial year.

If approved, the tax would apply to a broad segment of Karachi’s hospitality and event management industry. This includes traditional accommodation providers as well as short-term rental properties listed on platforms such as Airbnb, reflecting the growing role of the sharing economy in the city’s tourism and lodging sector.

Municipal officials believe the measure could create a more diversified revenue stream for the local government at a time when urban centers are facing increasing financial pressures. The additional revenue is expected to support city management initiatives and public service delivery.

However, the proposal may also spark debate among business owners and industry stakeholders. Operators within the hospitality sector could raise concerns about the potential impact on operating costs, pricing, and customer demand, particularly in an already challenging economic environment.

The final decision will depend on budget deliberations and formal approval by the relevant authorities. Until then, the proposal remains under consideration as part of KMC’s broader fiscal planning for the upcoming financial year.

The development highlights Karachi’s ongoing efforts to expand its tax base and explore new revenue sources while balancing the interests of businesses and consumers.