National Assembly panel approves sales tax on 116 more items to raise Rs50 billion

The National Assembly Standing Committee on Finance has approved the inclusion of 116 more items across 21 categories in the third schedule of the sales tax law, a move expected to generate Rs50 billion in additional revenue for the Federal Board of Revenue.

The newly included items cover a wide range of packaged and retail products, including vegetable oil, sugar confectionery, pasta, spaghetti, macaroni, noodles, lasagna, ketchup, sauces, beverages, jellies, insecticides, plates, tableware, toilet articles, school bags, travelling bags, wallets, footwear, crockery, car accessories, milk, shaving goods, jams, ceramic products, tiles, commodes and household utensils.

Under the third schedule, sales tax is collected from manufacturers on the basis of the printed market price of goods, bringing more packaged retail products into the tax net.

Hamid Ateeq Sarwar, Member Strategic Transformation, told the committee that prices of the affected goods could increase temporarily before stabilising over time.

The measure will expand market-price-based sales tax collection to almost every packaged product sold in retail stores.

However, the standing committee raised concerns over the practical difficulty of charging sales tax at printed market price on imported goods.

The proposal forms part of the government’s broader effort to raise revenue through changes in the sales tax regime.