Just days after the latest petrol bomb and ahead of a new one likely tomorrow, the federal government has restored the standard 18 percent general sales tax on imported sugar, withdrawing a major tax concession that had been introduced last year to stabilize domestic supply and control prices.
According to notifications, the reduced sales tax rate of 0.25 percent has been abolished, with the revised 18 percent rate taking effect from April 22, 2026.
The rollback comes after a sharp increase in sugar imports during the current fiscal year. Data from the Pakistan Bureau of Statistics showed that sugar imports surged by more than 7,900 percent in the first seven months, reaching over $17.46 million compared to just $211,800 in the same period last year.
The concession had originally been granted in August 2025 on sugar imports carried out by the Trading Corporation of Pakistan under a government-approved plan.
The earlier relief allowed the import of 500,000 tons of sugar at a significantly lower tax rate to address supply shortages and rising prices in the domestic market. However, the latest decision signals a policy reversal as authorities move to normalize the tax regime.
Imports accelerated further in January 2026, rising to $23.4 million,. The surge in imports indicates that the earlier tax concession played a key role in boosting supply through international purchases.
The broader import bill has also been rising, with total food imports increasing by 19.26 percent during the July to January period to exceed $5.5 billion. Major contributors included palm oil, tea, and dried fruits, highlighting ongoing pressure on Pakistan’s external account.
The restoration of the 18 percent tax suggests the government is now shifting focus from price stabilization to revenue generation and fiscal consolidation.