The new budget is likely to impose sales tax on several items including baby formula, ghee and cooking oil

The new federal budget has proposed to increase taxes on several items of daily use for the public.

According to sources, an in-principle decision has been taken to include infant formula milk, vegetable ghee, cooking oil, ketchup, tea leaves, sugar, powdered milk and dozens of other food items in the third schedule of sales tax. Under this, it will be mandatory to print sales tax on the retail price of these items.

In addition, there is a possibility of doubling the climate support levy on petroleum products. This levy, currently collected at Rs 2.5 per liter, can be increased to Rs 5 per liter. This is expected to generate more than Rs 90 billion in revenue in the next fiscal year.
Other key proposals include:

• Sales tax exemption on CKD kits of electric vehicles likely to be abolished from July 1, 2026
• Proposal for capital gains tax of 10 to 30 percent on crypto trading
• Plan to impose new taxes worth Rs220 billion
• Fixed tax scheme for traders (tax of Rs25,000 on annual sales of Rs200 million)
• Proposal for tax exemption for former tribal areas to be abolished

A total of Rs22 billion is proposed for the health sector, which includes several projects including the Islamabad Cancer Hospital, the Anti-Hepatitis and Diabetes Programme.
These proposals are likely to be included in the new budget as per the demands of the IMF.