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FBR slaps broad levies on food, household items

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– The Federal Board of Revenue (FBR) has put forward a host of substantial tax initiatives to augment revenue in the Budget 2026-27.

The tax collection target for the upcoming fiscal year was fixed at Rs15,264 billion and the budget was expected to include about Rs650 billion in additional levies, including nearly Rs150 billion in new taxes, sources said.

The proposed idea may apply sales tax on hundreds of retail-packed commodities, including milk, baby formula and other dairy products.

Other items such as ghee, cooking oil, sweets, pasta and several spices have also been recommended to be included under the 18% General Sales Tax (GST) regime.

The suggestions also include taxation of retail-packed agricultural inputs, insecticides, plastic household products, kitchenware, storage items, bags, suitcases and other travel goods.

Other items projected to come under the sales tax net are bathroom fittings, sanitary equipment and domestic accessories like crockery, as well as all forms of footwear.

In the auto sector, the proposal is to tax the retail sales of autos and motor parts. Luxury SUVs costing between Rs20 million and Rs30 million could be taxed at 30%, while those beyond Rs30 million could be taxed at 40%.

There is also a proposal to levy a 5% tax on purchases from unregistered suppliers and to boost the tax rate on distributors from 0.25% to 0.50%. Under the current idea, commercial importers that sell imported raw materials could also be taxed at 3%.

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Business

For three days, Pakistan lowers the price of petrol and diesel.

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For a three-day period starting on August 1, the government has announced a slight decrease in the cost of petroleum products, including gasoline and high-speed diesel (HSD).

The Petroleum Division said that the price of high-speed diesel has been lowered by Rs0.66 per litre, resulting in a new retail price of Rs392.38 per litre.

Additionally, the price of gasoline has been lowered by Rs0.12 per litre, to Rs336.03 per litre.

According to the letter, the updated pricing will go into effect between August 1 and August 3.

According to the administration, the little cut was taken after accounting for both domestic economic and budgetary factors as well as global oil costs.

In light of persistent economic pressures and swings in the world’s crude oil markets, the most recent adjustment provides customers with little respite.

The most recent update comes after the government regularly reviews fuel costs, which are decided by the currency rate, domestic tax laws, and global market trends.

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FBR surpasses its July revenue goal by Rs40 billion.

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In July 2026, the Federal Board of Revenue (FBR) collected Rs820 billion in net revenue, exceeding the monthly target by Rs40 billion.

The July tax collection target was set at Rs780 billion, but net receipts came in at Rs820 billion, according to FBR documents.

According to the papers, gross tax collections for the month totaled Rs918 billion. Net receipts were Rs820 billion after Rs98 billion of this sum was reimbursed to taxpayers under different refund categories.

Gross collections under the income tax head was Rs343 billion. Net income tax revenues fell short of the objective of Rs323 billion, coming in at Rs308 billion after the payment of Rs35 billion in refunds.

In July, sales tax collections came to Rs413 billion, while sales tax refunds were Rs53 billion.

The Federal Excise Duty (FED) collected Rs48 billion, compared to the objective of Rs47 billion, according to the FBR.

In July 2026, customs duty receipts totaled Rs115 billion, surpassing the designated objective of Rs105 billion by Rs10 billion.

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Foreign investors return to PSX after almost two years

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Foreign investors became net purchasers at the Pakistan Stock Exchange (PSX) for the first time in almost two years, indicating restored confidence in the country’s capital market at the beginning of the current fiscal year.

According to official data, foreign investors invested $34.4 million in the PSX in July 2026, a significant reversal from June 2026 when they sold $180 million worth of shares and pulled money out of the market.

The data showed that foreign investors were net buyers for the first time in nearly 23 months, with banking and exploration companies receiving the greatest investment in the month.

Foreign investors made investments in the banking sector to the tune of $13.8 million during July, while investments in exploration businesses amounted to $6.7 million.

However, the data also revealed that international investors preferred to dispose of cement stocks over the same period.

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