National ( The cow news digital ) The upcoming federal budget is expected to introduce significant changes in taxation, including a potential doubling of the climate support levy on petroleum products and the inclusion of dozens of essential food items under the sales tax regime.
According to sources, the budget may impose sales tax on everyday essentials such as infant formula, ketchup, vegetable ghee, cooking oil, tea leaves, sugar, powdered milk, and their derivative products. Retailers could be required to print the sales tax on these items at the point of sale. These goods are likely to be added to the Third Schedule for sales tax purposes.
Items already subject to heavy taxation, including staple foods and basic necessities, are expected to remain under existing levies, raising concerns about further price increases for consumers.
Additionally, exemptions on locally assembled or manufactured electric vehicles (EVs) may end on June 30, 2026. The preferential sales tax period for hybrid EVs is also expected to conclude at the same time. The government may maintain a one percent sales tax on domestic EV production until that date, while no further concessions are anticipated.
From July 1, petroleum products could see the climate support levy increase from Rs 2.5 per liter to Rs 5 per liter, generating an estimated Rs 90 billion during the upcoming fiscal year.
The new budget may introduce additional measures to raise Rs 220 billion in taxes. Proposals include a fixed tax scheme for traders, where businesses with annual sales of Rs 20 crore would pay Rs 25,000, potentially exempting them from audits. The International Monetary Fund (IMF) has reportedly recommended increasing the GST rate from 18% to 19%.
The budget could also revise the super tax by reducing it by 1–2%, while a capital gains tax of 10–30% may be applied to cryptocurrency trading under amendments to the 2001 Tax Act. Tax exemptions for former tribal areas may also be removed.
In the health sector, the proposed budget allocates Rs 22 billion for new and ongoing projects. Major allocations include Islamabad Cancer Hospital (Rs 1.298 billion), Polyclinic projects (Rs 1.5 billion), and initiatives for diabetes, hepatitis C, and communicable disease control. Other programs, such as HIV, malaria, and TB prevention, are expected to receive Rs 50 crore each.
Experts warn that these measures could significantly impact household expenses and business operations, highlighting the government’s focus on revenue generation for the 2026-27 fiscal year.
