The Federal Board of Revenue (FBR) is finalizing the Finance Bill for 2025–26, which is expected to introduce around Rs. 200 billion in new taxes. One of the key proposals includes an 18% sales tax on the import of solar panels and on e-commerce transactions.
As part of its broader tax reform strategy, the FBR has completed a review of items listed under the Sixth Schedule (tax exemptions) and the Eighth Schedule (reduced rates) of the Sales Tax Act. Many of the current exemptions and concessions are likely to be withdrawn.
In a partial relief, certain cancer-related medical equipment and lifesaving drugs are expected to be added to the list of tax-exempt items.
Other Key Tax Proposals in Finance Bill 2025–26
- 18% sales tax on services provided in the Islamabad Capital Territory.
- 18% sales tax on goods manufactured in the ex-tribal areas.
- Expansion of the Third Schedule of the Sales Tax Act to include:
- Imported chocolates
- Coffee
- Cereals
- Introduction of a 5% federal excise duty on ultra-processed food products, which may include:
- Frozen foods and frozen meat
- Chips and biscuits
- Carbonated drinks
- Instant noodles and ice cream
- Sauces, ready-made meals, and sausages
These proposed changes aim to broaden the tax base and help meet the government’s revenue targets under its fiscal framework.
The final version of the Finance Bill 2025–26 is expected to be unveiled later this month.
