Several products currently enjoying reduced General Sales Tax (GST) rates could face higher taxes in the upcoming FY2026-27 federal budget as the government reviews tax concessions to boost revenue collection.
According to officials, products listed under the Eighth Schedule of the Sales Tax Act are under consideration as part of broader tax reforms aimed at expanding Pakistan’s tax base and reducing exemptions.
The Eighth Schedule currently offers concessional GST rates ranging from 1 percent to 13 percent, compared to the standard GST rate applied to most goods and services.
Products that could be affected include:
- Electric vehicles (EVs)
- Hybrid vehicles
- Imported laptops and computers
- Solar panels and photovoltaic cells
- Tractors
- DAP fertilizer
- Pharmaceutical raw materials
- Poultry and cattle feed
- Stationery products
- Certain food items
If these concessions are reduced or withdrawn, consumers and businesses could face higher prices on a wide range of products.
The proposed review is part of the government’s ongoing efforts to increase tax revenues and meet fiscal targets under economic reform programs supported by the International Monetary Fund (IMF).
Officials say the broader goal is to simplify the tax system, reduce preferential treatments, and create a more uniform taxation structure across sectors.
Although no final decision has been made, businesses and industries benefiting from lower GST rates are closely watching the upcoming budget announcements.
The federal budget for FY2026-27 is expected to determine whether the government will maintain, reduce, or phase out some of the tax concessions currently available under the Eighth Schedule.
