ISLAMABAD (Kashmir English): Several key tax proposals have emerged ahead of the announcement of the federal budget 2026-27, with the government considering relief measures for exporters alongside an increase in levies on petroleum products and sales tax regulations.
According to budget proposals, the government is considering abolishing the existing one percent advance tax on exporters in a bid to support the export sector and enhance the country’s export competitiveness.
Moreover, the government has proposed increasing the climate support levy on petroleum products from Rs2.5 per litre to Rs5 per litre. The proposal is part of broader efforts to generate resources for climate-related initiatives and environmental sustainability measures.
The proposals also include a reduction in customs duty on imported makeup products from 44 percent to 40 percent. In addition, tax relief is expected on imported machinery and equipment used by beauty parlours, health and fitness centres, and medical clinics.
If approved, imported personal care products such as sunblock, sunscreen, shaving cream, aftershave, and lotions could become cheaper for consumers.
The budget proposals further suggest making it mandatory to print retail prices on several food items, including baby formula milk, ketchup, ghee, cooking oil, and tea leaves. The measure is aimed at improving sales tax collection and ensuring greater transparency in pricing.
Another significant proposal under consideration is the withdrawal of tax exemptions currently available to the merged districts of Khyber Pakhtunkhwa.
