The Federal Board of Revenue is preparing a series of measures in the upcoming Federal Budget 2026-27 aimed at curbing sales tax evasion, with plans to bring around 20 categories of commonly used consumer products under the Third Schedule of the Sales Tax Act, according to sources.
Sources told ProPakistani that the move could help the government collect an additional Rs. 60 billion in sales tax revenue by strengthening documentation and improving transparency in retail markets.
Although these products are already subject to the standard sales tax rate, their inclusion in the Third Schedule would require manufacturers and importers to prominently display both the retail price and the amount of sales tax on product packaging. Tax officials believe this will make it more difficult to underreport sales and manipulate tax liabilities.
Among the products likely to be included are packaged dairy items such as milk, yogurt, cheese, milk cream, and tea cream. Baby food products, cereals, and nutritional supplements may also be brought under the enhanced disclosure regime.
Sources said frozen food products, including frozen kebabs and nuggets, are also under consideration. In addition, manufacturers of toothpaste, toothbrushes, shaving creams, shaving foams, and shaving brushes could be required to print sales tax details directly on product packaging.
The proposed expansion may also cover pet food products, with companies required to disclose the applicable sales tax amount alongside the retail price. Officials believe such measures will improve consumer awareness while reducing opportunities for tax leakage.
The FBR is also considering a significant expansion of the Third Schedule to include a wide range of consumer electronics and household appliances. Products under review include LED televisions, refrigerators, washing machines, juicers, air conditioners, room coolers, fans, gas stoves, geysers, cooking ranges, and other gas-powered appliances.
According to sources, the initiative forms part of the government’s broader strategy to expand the documented economy, improve tax compliance, and increase revenue collection without introducing major new tax rates. The final decision is expected to be announced as part of the Federal Budget 2026-27.
