Several important tax proposals have emerged for the upcoming federal budget, including relief for exporters, a higher climate levy on petroleum products and the possible withdrawal of tax exemptions for merged districts in Khyber Pakhtunkhwa.
The proposals also include duty cuts on imported makeup products, relief for beauty and health-related machinery, and mandatory retail price printing on selected food items to improve sales tax collection.
In the budget for the next fiscal year, the government is considering incentives to increase exports and make Pakistani products more competitive in international markets.
One key proposal is to abolish the one percent advance tax currently imposed on exporters. Officials believe removing this tax could reduce pressure on exporters and support the country’s export growth.
Double climate levy on petroleum
While exporters may receive relief, the government is also preparing new financial burdens for certain sectors. A proposal has been made to increase the climate levy on petroleum products from Rs2.5 per litre to Rs5 per litre.
If approved, the measure would double the existing climate levy on petroleum products.
No tax exemptions for merged districts
The budget proposals also include a recommendation to abolish tax exemptions currently available to the merged districts of Khyber Pakhtunkhwa.
The proposal is under consideration as part of broader tax measures for the next fiscal year. If approved, the move would bring an end to existing tax relief for the merged districts.
Cheaper imported makeup products
The government is also considering relief for the cosmetics industry. Budget documents propose reducing duty on imported makeup products from 44% to 40%.
This would amount to a four percentage point cut in duty on imported cosmetics.
Tax relief is also expected on imported machinery used in beauty parlours, health fitness centers and clinics. The duty on raw materials used by beauty parlours may also be reduced from 44% to 40%.
If the proposals are approved, several imported personal care products could become relatively cheaper. These may include imported sunblock, sunscreen, shaving cream, aftershave and different types of lotions.
Retail price printing may become mandatory
The government is also considering steps to make the sales tax collection system more effective. One proposal would make it mandatory to print retail prices on several food items.
These items include infant formula milk, ketchup, ghee, cooking oil and tea leaves. Officials believe the measure could help improve sales tax collection and strengthen documentation in the retail supply chain.
The tax proposals show that the upcoming budget may combine targeted relief with new revenue measures.
On one hand, exporters, cosmetics importers, beauty parlours, health fitness centers and clinics may benefit from reduced tax or duty burdens.
On the other hand, consumers and businesses linked to petroleum products may face a higher climate levy, while merged districts of Khyber Pakhtunkhwa could lose existing tax exemptions.
