The Federal Board of Revenue (FBR) is considering a major expansion of sales tax documentation measures in the Federal Budget 2026-27 by bringing nearly 20 categories of consumer products under the Third Schedule of the Sales Tax Act, sources told ProPakistani.
The proposed move is aimed at curbing sales tax evasion, improving transparency, and strengthening tax compliance across retail markets. According to officials, the initiative could generate an additional Rs. 60 billion in sales tax revenue by reducing underreporting and enhancing documentation.
Although the products under consideration are already subject to the standard sales tax rate, their inclusion in the Third Schedule would require manufacturers and importers to prominently print both the retail price and the exact amount of sales tax on product packaging.
Tax authorities believe the measure will make it more difficult for businesses to manipulate tax liabilities and conceal actual sales figures.
Sources said packaged dairy products such as milk, yogurt, cheese, milk cream, and tea cream are likely to be included in the expanded regime. Baby food, breakfast cereals, and nutritional supplements are also under consideration.
Frozen food products, including frozen kebabs and nuggets, may also be brought under the proposed disclosure requirements. In addition, manufacturers of personal care products such as toothpaste, toothbrushes, shaving creams, shaving foams, and shaving brushes could be required to display sales tax amounts directly on packaging.
The proposal may further extend to pet food products, requiring companies to clearly mention the applicable sales tax alongside the retail price. Officials believe this step will not only improve tax compliance but also increase consumer awareness regarding indirect taxes paid on everyday goods.
The FBR is also evaluating the inclusion of several consumer electronics and household appliances under the Third Schedule. Products being reviewed include LED televisions, refrigerators, washing machines, air conditioners, room coolers, fans, juicers, gas stoves, geysers, cooking ranges, and other gas-powered appliances.
According to sources, the initiative is part of the government’s broader strategy to expand the documented economy, improve revenue collection, and reduce tax leakages without introducing significant new tax rates.
The final decision on the proposed measures is expected to be announced as part of the Federal Budget 2026-27.
