Budget 2026: From Baby Formula Milk to Electronics – over 3,000 Items to carry 18% Sales Tax

ISLAMABAD – Pakistan is set to implement major tax enforcement reform from July 1, requiring printed prices and 18% sales tax on more than 3,000 consumer goods. The move, aimed at curbing tax evasion, will bring 20 product categories under the Third Schedule of the Sales Tax Act and is expected to generate around Rs. 60 billion in additional revenue. The measure covers a wide range of essentials, from food and personal care items to household appliances. Pakistan is set to implement a sweeping tax enforcement measure from July 1 requiring printed retail prices and an 18 percent sales tax on the packaging of more than 3,000 daily-use consumer products, in a move aimed at curbing tax evasion and boosting revenue. The federal government will shift 20 product categories into the Third Schedule of the Sales Tax Act under the new framework, which officials estimate will generate around Rs. 60 billion in additional revenue. Under the revised system, the sales tax will be applied at the manufacturing stage, while companies will be required to clearly print both the retail price and the applicable tax on product packaging. Authorities say the change is intended to address longstanding loopholes that have allowed underreporting and tax avoidance across supply chains. The measure will apply to a broad range of food and household items, including packaged milk, yogurt, cheese, milk cream, tea creamer, powdered milk, full-fat milk, infant formula, baby food, porridge and food supplements. Frozen products such as parathas, kebabs and nuggets are also included, alongside condiments including ketchup, mayonnaise, barbecue sauce and pizza sauce. Personal care items such as toothpaste, toothbrushes, shaving cream, shaving foam and shaving brushes will also fall under the new requirements. Pet food for cats and dogs is similarly included. In addition, the government is expanding the Third Schedule to cover home appliances as part of a wider effort to strengthen compliance in the elect