FBR slaps broad levies on food, household items

– The Federal Board of Revenue (FBR) has put forward a host of substantial tax initiatives to augment revenue in the Budget 2026-27.

The tax collection target for the upcoming fiscal year was fixed at Rs15,264 billion and the budget was expected to include about Rs650 billion in additional levies, including nearly Rs150 billion in new taxes, sources said.

The proposed idea may apply sales tax on hundreds of retail-packed commodities, including milk, baby formula and other dairy products.

Other items such as ghee, cooking oil, sweets, pasta and several spices have also been recommended to be included under the 18% General Sales Tax (GST) regime.

The suggestions also include taxation of retail-packed agricultural inputs, insecticides, plastic household products, kitchenware, storage items, bags, suitcases and other travel goods.

Other items projected to come under the sales tax net are bathroom fittings, sanitary equipment and domestic accessories like crockery, as well as all forms of footwear.

In the auto sector, the proposal is to tax the retail sales of autos and motor parts. Luxury SUVs costing between Rs20 million and Rs30 million could be taxed at 30%, while those beyond Rs30 million could be taxed at 40%.

There is also a proposal to levy a 5% tax on purchases from unregistered suppliers and to boost the tax rate on distributors from 0.25% to 0.50%. Under the current idea, commercial importers that sell imported raw materials could also be taxed at 3%.