NA finance panel backs 0.5% minimum tax for distributors, wholesalers of 14 goods

The National Assembly Standing Committee on Finance and Revenues has recommended a 0.5% minimum tax rate for distributors, dealers, sub-dealers and wholesalers of 14 categories of goods under proposed amendments to the Finance Bill 2026-27.

The proposed rate will apply under Sub-Section (1) of Section 113, subject to the condition that beneficiaries of the reduced rate appear on the active taxpayers’ lists issued under the Sales Tax Act, 1990 and the Income Tax Ordinance, 2001.

The goods covered under the proposal include pharmaceutical products, fertiliser, cigarettes, sugar, locally manufactured mobile phones, and fresh and frozen food in canned or packaged form.

The list also includes electronics, beverages, dairy products, pasta, cereals, biscuits, nuts, snacks and similar packaged food items.

Condiments and baking items in bottled or packaged form, skincare and cosmetics, hair care, oral care, baby care and cleaning agents such as laundry detergents, dishwashing soaps and floor cleaners are also covered.

Other items include toilet paper, paper towels, facial tissues, napkins and similar products, along with trash bags, aluminium foil, air fresheners and insect sprays.

The committee has also proposed a 5% withholding tax on revenues received from social media platforms.

The recommendation is part of the committee’s 15-page report on amendments to the Finance Bill 2026-27, which is to be placed before the National Assembly.