Pakistan Considers New Taxes on Food Auto and Retail Goods

The FBR tax framework is expected to see major changes as the Federal Board of Revenue prepares proposals for the upcoming Budget 2026-27.

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According to sources, the government is considering wide-ranging tax measures aimed at increasing revenue. Moreover, the proposals include both new taxation areas and expansion of existing sales tax coverage. As a result, several consumer and industrial sectors may be affected.

FBR Tax Collection Target Set

The Federal Board of Revenue has set a tax collection target of Rs15,264 billion for the next fiscal year.

In addition, officials are planning around Rs650 billion in additional tax measures. This includes nearly Rs150 billion in new taxes. Therefore, the budget reflects a strong focus on revenue expansion.

FBR Tax On Retail Goods Proposed

Under the proposed FBR tax plan, sales tax may be extended to a wide range of retail-packed goods.

Items such as milk, infant formula, and dairy products are included in the proposal. Furthermore, ghee, cooking oil, sweets, pasta, and spices may also be brought under an 18% GST regime.

As a result, everyday consumer goods could see broader taxation coverage.

FBR Tax Expansion Across Sectors

The proposals also suggest extending the FBR tax net to multiple sectors.

Retail-packed agricultural inputs, pesticides, and household goods are included. In addition, items such as kitchenware, storage products, bags, and suitcases may also be taxed.

Footwear of all types is expected to fall under the sales tax structure as well. Similarly, bathroom fittings, sanitary ware, and crockery are part of the proposed list.

FBR Tax Impact On Automobiles

The automobile sector is also included in the proposed FBR tax changes.

Luxury SUVs priced between Rs20 million and Rs30 million may face a 30% tax. Meanwhile, vehicles above Rs30 million could be taxed at 40%.

In addition, sales of vehicles and auto parts may also be brought under taxation. Therefore, the auto sector could experience significant adjustments.

FBR Tax On Imports And Distributors

The proposal also includes changes for importers and distributors under the FBR tax system.

A 5% tax is suggested on purchases from unregistered suppliers. Moreover, the tax rate for distributors may increase from 0.25% to 0.50%.

Commercial importers selling raw materials could also face a 3% tax. Consequently, supply chain costs may increase depending on final approval.

Budget 2026-27 Revenue Strategy

The proposed FBR tax measures reflect a broader strategy to increase revenue collection.

Authorities continue to explore new taxation areas while expanding the existing GST base. As a result, the final budget may include significant structural changes in taxation policy.

Observers expect further developments as budget discussions continue.