The Federal Budget 2025-26 is expected to bring price increases for a wide range of consumer products following proposed changes in the General Sales Tax (GST) framework. According to details outlined in the Finance Bill, several goods will be brought under the Third Schedule, a move aimed at enhancing tax collection and broadening the revenue base.
Government estimates suggest that the inclusion of these products in the tax regime could generate approximately Rs70 billion in additional revenue during the next fiscal year. Officials believe the measure will contribute to improving tax compliance and strengthening public finances.
Products likely to be affected by the GST expansion include milk and dairy items, sweets, jams, jellies, ketchup, spices, cooking oil, ghee, and bakery products. As a result, consumers may experience higher retail prices on several everyday food items.
The proposed taxation measures also extend to household and personal care products. Crockery, plastic household goods, hair oil, shampoo, perfumes, body sprays, footwear, and sanitary products are among the items expected to become more expensive once the new tax provisions take effect.
In addition, a number of other consumer and commercial products may witness price increases. These include suitcases, travel bags, cameras, kitchenware, e-cigarettes, agricultural chemicals, and disinfectant products. Market analysts expect businesses to pass a portion of the additional tax burden on to consumers.
The Finance Bill also proposes higher taxation on luxury electric vehicles. The government estimates that the revised tax structure on premium EVs will generate an additional Rs25 billion in revenue for the national exchequer.
Furthermore, authorities expect to collect around Rs30 billion in additional taxes by eliminating the profit margin disparity between industrial and commercial importers. The measure is intended to create a more uniform taxation system while increasing government revenue collection.
Overall, the Federal Budget 2025-26 GST proposals reflect the government’s strategy to expand the tax net and boost revenue generation, although the measures may also contribute to higher costs for consumers across multiple sectors.
