Pakistan to Enforce 18% GST on Over 3,000 Daily-Use Products
From July 1, the Pakistani government will enforce an 18 percent Goods and Services Tax (GST) on more than 3,000 daily-use products. This move aims to curb widespread tax evasion by requiring the printing of prices and tax amounts on product packaging, thereby increasing sales tax transparency and revenue.
The government plans to include 20 product categories under the Third Schedule of the Sales Tax Act, which will mandate the 18 percent GST to be fixed at the manufacturing stage. According to officials, this adjustment is expected to generate an additional Rs. 60 billion in tax revenues.
Currently, these products are subject to the standard sales tax; however, their exclusion from the Third Schedule has allowed some manufacturers and retailers to evade GST payments. The new measure will tighten tax compliance by legally binding companies to display the tax-inclusive price on product labels.
The affected products span a variety of sectors. In the food category, items such as packaged milk, yoghurt, cheese, milk cream, tea creamer, powdered and fat milk, infant formula, porridge, baby food, and food supplements will be impacted. Frozen foods like parathas, kebabs, and nuggets, as well as condiments including ketchup, mayonnaise, barbecue, and pizza sauces, are also covered.
Personal care items under the new GST rule include toothpaste, toothbrushes, shaving cream, shaving foam, and shaving brushes. Even pet food products for cats and dogs will be regulated under the updated tax guidelines.
The government’s reform extends beyond consumables to home appliances, aiming to reduce tax evasion in the electronics market. Key household appliances like LED televisions, refrigerators, washing machines, juicers, blenders, air conditioners, room coolers, fans, stoves, geysers, cooking ranges, and gas appliances will now be taxed under the Third Schedule.
These changes come as part of the government’s broader budget strategy for fiscal year 2026-27, intended to strengthen tax collection and close loopholes in the sales tax system. By enforcing tax inclusion on product packaging, authorities expect to improve accountability and transparency in compliance.
The initiative reflects the federal government’s commitment to fiscal responsibility amid rising economic challenges, signaling tighter regulation across consumer goods sectors to enhance revenue collection without altering the nominal tax rate.
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