EVs, Solar Panels, Laptops, Cattle Feed to Get More Expensive Next Week

Several products currently enjoying reduced General Sales Tax (GST) rates could face higher taxation in the upcoming FY2026-27 budget as Pakistan continues efforts to broaden the tax base under its reform commitments.

A number of goods currently subject to concessional GST rates may come under review as the government moves to rationalize tax expenditures and gradually withdraw exemptions.

The Eighth Schedule contains products that currently benefit from reduced GST rates ranging from 1 percent to 13 percent, significantly below the standard sales tax rate.

Among them are locally manufactured electric vehicles, hybrid vehicles, imported computers and laptops, tractors, photovoltaic solar cells, fertilizers such as DAP, pharmaceutical raw materials, poultry feed, cattle feed, stationery products, and selected food items.

These concessions could come under pressure as Pakistan seeks to increase revenue collection and meet fiscal targets agreed with international lenders, including the International Monetary Fund (IMF).

The government’s broader tax reform agenda aims to reduce preferential tax treatments, simplify the tax structure, and expand the effective tax base. Similar reforms have been a recurring feature of IMF-supported programs aimed at improving revenue mobilization and reducing distortions in the economy.

While no final decision has been announced, sectors benefiting from reduced GST rates are expected to closely monitor the upcoming budget for any changes that could affect prices, investment decisions, and consumer demand.

The federal budget for FY2026-27 is expected to provide greater clarity on whether the government intends to maintain, reduce, or completely phase out some of the existing sales tax concessions currently available under the Eighth Schedule of the Sales Tax Act.