Major Tax Overhaul: 18% GST Proposed on Everyday Goods

Pakistan is preparing a major fiscal tightening step as the federal government moves to implement a fixed 18 percent sales tax along with mandatory printed pricing on more than 3,000 commonly used consumer goods starting from 1 July. The decision is aimed at improving tax compliance and reducing widespread revenue leakage in retail and manufacturing chains. Under the new plan, around 20 product categories will be brought under the Third Schedule of the Sales Tax Act, which shifts taxation to the manufacturing stage and eliminates room for underreporting at later sales points. Authorities estimate that this restructuring could generate an additional Rs. 60 billion in revenue for the national exchequer. A wide range of everyday essentials will be affected, including packaged dairy items such as milk, yoghurt, cheese, cream, and powdered milk, as well as infant nutrition products and food supplements. The policy also extends to frozen food items, sauces, and condiments, along with personal care goods like toothpaste, shaving cream, and grooming accessories. Even pet food products are included in the expanded tax framework. Furthermore, the government plans to extend the same structure to home appliances such as refrigerators, air conditioners, televisions, and kitchen equipment, signaling a broader effort to tighten tax enforcement and formalize pricing across major consumer markets.