The prices of several items are going to increase after the announcement of the federal budget 2025-26 on Tuesday.
According to sources, a wide range of products and services will get costlier due to various new taxes, levies, and duties proposed in the budget. While some sectors are expected to get tax relief, many essential and luxury goods will see significant price hikes.
Here is a list of items that are expected to become more expensive:
Petroleum & Fuel
- Petroleum levy hiked: Diesel and petrol will see an additional levy up to Rs 80 per litre; high octane and E-10 petrol prices will increase from Rs 50 to Rs 75 per litre.
- A 6% General Sales Charge (GSC) will be imposed on petrol, diesel, and other related fuels.
Imported Electronics & Vehicles
- 10% sales tax will be imposed on imported PCs, laptops, notebooks, and other electronics.
- Withholding taxes on imported mobile phones will rise significantly (18% GST, plus PTA levy up to 25% on phones priced over $500), making high-end devices like iPhones much costlier.
- Duty concessions on hybrid/electric and imported luxury vehicles will be removed, leading to steep price increases.
Food & Essentials
- 10% sales tax on bakery items such as vermicelli, sheermal, buns, rusks, poultry and cattle feed, as well as on newsprint and books.
- Federal excise duty (FED) on sugar and cement: Sugar manufacturers will pay Rs 15/kg excise duty; cement FED will rise from Rs 2 to Rs 3 per kg.
- Sugar, milk, ghee, cooking oil, and flour will face additional taxes. For example, UHT milk has already risen by ~25% after the previous 18% tax.
- Flour mills will now pay 5% withholding tax, leading to higher flour prices.
- Imported dried and fresh fruits will no longer enjoy exemptions, resulting in price hikes.
Consumer & Textile Goods
- GST will increase from 15% to 18% for Tier-1 retailers selling branded leather and textile products.
- A 10% sales tax will be imposed on stationery, newsprint, and books.
- Taxes have been increased on cosmetics, soaps, shampoos, perfumes, and lotions, making these consumer goods more expensive.
Agricultural Inputs
- 10% sales tax on local poultry and cattle feed.
- 15% GST on fertilizers, seeds, tractors, and other agricultural inputs.
Other Tax Proposals
- Sales tax on made-in-Pakistan vehicles will increase from 12.5% to 18%.
- Tax exemption for the formerly Federally Administered Tribal Areas (FATA) will be abolished, and a 12% tax is likely to be imposed.
- New taxes have been proposed on money earned through freelancing, social media platforms, and foreign income sources.
- Capital gains tax on the real estate sector will be increased, while federal excise duty on the real estate sector is proposed to be removed.
- Super tax on large companies is likely to be reduced slightly, offering some relief to the corporate sector.
- The construction sector is expected to get tax relief, and withholding taxes on imported raw materials for industry are likely to be decreased or abolished.
- Customs duty on several imported items may be reduced by 2-3%.
