The federal government has proposed a major tax burden in Budget 2026-27, with the Federal Board of Revenue assigned a massive tax target of Rs15,264 billion and new tax measures worth more than Rs650 billion.
According to budget documents, the FBR’s tax collection target for Budget 2026-27 has been fixed at Rs15,264 billion.
The new tax measures are worth Rs650 billion, including fresh taxes of around Rs150 billion. Another figure in the documents places the overall tax measures at Rs600.5 billion, with Rs150 billion in new taxes included.
Sales tax imposed on retail-packaged items
The government has decided to impose sales tax on hundreds of items sold in retail packaging.
The items include milk, baby formula milk and other milk-based products. An 18% GST will also be collected on ghee, cooking oil, sweets, pasta, sauces, jams and fruit juices.
Agricultural medicines and disinfectants sold in retail packaging have also been brought under the sales tax regime.
Household goods, shoes, travel items
The budget documents show that tax has been imposed on plastic household items, kitchenware and storage items. Bags, suitcases, handbags and other travel goods will also become more expensive.
All types of shoes have been brought under the scope of sales tax, while bathroom fittings, sanitary ware and washroom accessories have also been taxed.
Sales tax will also be collected on crockery and other household items.
Vehicles, auto accessories taxed
The government has also imposed tax on retail sales of vehicles and automobile accessories. A 30% tax has been imposed on luxury SUVs valued between Rs20 million and Rs30 million.
Vehicles worth more than Rs30 million will face a 40% tax, according to the budget document. However, no tax has been imposed on solar panels.
The budget proposes a 5% tax on purchases made from unregistered suppliers. The tax rate on distributors has been increased from 0.25% to 0.50%.
Commercial importers who import raw materials and sell them will be required to pay 3% tax.
Property buyers to declare income sources
The government has proposed that buyers purchasing property worth more than Rs100 million must declare their sources of income. The law will come into effect from July 1, 2026.
Those who fail to declare their income sources will not be allowed to buy property. The additional tax rate will continue to apply to non-filers involved in buying and selling property.
Relief on business-class travel
The government has also proposed a major reduction in Federal Excise Duty on business-class tickets for international travel.
The measure is being considered as a tax policy relaxation to support the air travel sector and encourage the purchase of international tickets from Pakistan.
According to FBR officials, the proposed reduction will provide relief to airlines and the travel industry and help boost Pakistan’s aviation market.
Proposed FED cuts
For business-class travel to the United States, FED is proposed to be reduced from Rs350,000 to Rs50,000. For tickets to the Middle East and Africa, FED is proposed to be cut from Rs105,000 to Rs25,000.
For passengers traveling to Europe, FED is proposed to be reduced from Rs210,000 to Rs40,000. For the Far East and Australia, FED is also proposed to be reduced from Rs210,000 to Rs40,000.
