Several important tax suggestions have arisen ahead of the budget for the next fiscal, including prospective relief measures for exporters, adjustments in import taxes and revisions to taxation on specific industries and items.

The administration said the proposed budget changes include incentives to encourage exports. It called for the abolition of the one per cent advance tax now imposed on exporters.

The plans also see a fall in import duty on cosmetic products, with the duty on imported beauty items possibly coming down from 44 percent to 40 percent.

Imported machinery and equipment used by health and fitness establishments, beauty parlours and medical clinics would also be tax-exempt.

If authorised, import levies on products such as sunblock, sunscreen, shaving cream, aftershave and lotions might be cut, making such items possibly cheaper.

The budget recommendations also seek to make it mandatory for retail pricing to be printed on products such as infant formula milk, ketchup, ghee, cooking oil and tea leaves. The measure is designed to improve the collection of sales taxes on food purchases.

The government also plans to increase climate levy on petroleum items and withdraw tax exemptions offered for combined districts of Khyber Pakhtunkhwa.

The proposal allows the climate levy on petroleum products to be hiked from Rs2.5 per litre to Rs5 per litre.

The measures are recommended as part of the budget planning process and must be approved before they take effect.

— The current Iran-US war has not only rattled the global energy markets and the international economy, but has also severely harmed Pakistan’s trade with shipments to Middle Eastern countries nosediving by as much as 70 percent.

Official documents obtained by Dunya News revealed that Pakistan had a substantial fall in exports in March and April. Exports to Gulf Cooperation Council (GCC) countries plummeted about 70 percent in March alone, from more than $315.1 million in March 2025 to $95.4 million in the same month in 2026.

The downturn continued in April albeit at a reduced pace, with shipments to GCC countries falling by more than 23 percent. April 2025 saw Pakistan send commodities worth $200 million to the region, while in April 2026, it exported goods worth $152.4 million.

The GCC bloc includes the United Arab Emirates, Bahrain, Oman, Saudi Arabia, Kuwait and Qatar.

March saw the UAE suffer the biggest loss in exports among member states, down 74 percent. Exports to Saudi Arabia decreased 56 percent, to Qatar by 64 percent and to Oman by 85 percent. While shipments to Kuwait fell 21 percent, with Bahrain recording a drop of 85 percent.

The violence has affected sea and air transport lines and raised prices for shipping and logistics, the Ministry of Commerce said. This has impacted the UAE hard because of the breakdown in its logistical network.

Pakistan is significantly reliant on the UAE’s Jebel Ali Port for regional trade, with approximately 80 percent of its trade with GCC countries moving through the key transit centre.

Trade experts worry that prolonged instability in the region could result in higher shipping insurance prices, slower flow of cargo and a further burden on Pakistani exporters already suffering rising production and transportation charges.

Analysts also see wider economic implications for Pakistan in case of lingering tensions, including pressure on foreign exchange earnings and trade balances, as the Middle East is a major destination for Pakistani exports and a key source of economic activity linked to overseas workers and regional trade.

Rana Tanveer Hussain, the Minister for National Food Security and Research, stated on Tuesday that Pakistan required intelligent taxes in order to encourage innovation, rural economy, and nutrition.

The minister was speaking at a high-level consultation that was organised by the Sustainable Development Policy Institute (SDPI). The purpose of the consultation was to discuss the rationalisation of the Federal Excise Duty (FED) on beverages and juice products in Pakistan. The consultation was attended by key stakeholders from the government, academia, industry, and development partners.

The economic, nutritional, industrial, and agricultural aspects of the current tax structure were the primary topics of debate, as were the broader implications that this structure has for the food and beverage industry in the country.

The minister emphasised that taxation is not only a fiscal instrument but also a policy tool that impacts consumer patterns, public health outcomes, and industrial growth. He said this in a statement.

He made the observation that the existing universal FED regime does not effectively reflect the major disparities in sugar content, nutritional value, and economic benefit across the many categories of beverages. As a result, he advocates for a taxation strategy that is more nuanced and evidence-based.

In his speech, Rana Tanveer Hussain emphasised that Pakistan’s policy framework needs to carefully balance several objectives. These objectives include the protection of public health, the sustainability of domestic agriculture, the competitiveness of industry, and the stability of government revenues.

He pointed out that these objectives are not in conflict with one another and that they can be achieved simultaneously through the establishment of policies that are calibrated and sensible.

The minister emphasised the connection between the beverage industry and agriculture, pointing out that the formal juice industry plays a significant role in the strengthening of agro-based value chains. This is accomplished by the industry’s acquisition of substantial quantities of locally produced fruits, which in turn creates opportunities for income for farmers, transporters, processors, packaging suppliers, and rural workers.

Specifically, he emphasised the significance of maintaining policy stability in this sector in order to foster investment, value creation, and sustained economic expansion.

During the same time, he brought attention to the rising problem of undocumented and unregulated markets, and he cautioned that undue pressure on documented sectors can unintentionally drive consumers towards alternatives that are cheaper and of lesser quality.

According to him, such transitions give rise to significant concerns surrounding food safety, consumer protection, and revenue leakage, and as a result, they necessitate careful policy calibration.

Additionally, the minister brought attention to the worldwide movement towards differentiated pricing based on sugar content and nutritional composition. He stated that Pakistan ought to proceed in a similar direction by supporting healthier product formulations and innovation within the business.