Islamabad, August 25, 2025 – The Federal Board of Revenue (FBR) has officially notified the revised sales tax framework for the fiscal year 2025-26 through amendments to the Sales Tax Act, 1990.
The updated law introduces key provisions impacting registered taxpayers, importers, and e-commerce businesses across Pakistan.
Key Highlights:
1. Standard Tax Rate
Under Section 3 of the Act, a standard sales tax of 18% is applicable on:
o All taxable supplies made by registered persons in the course of business.
o Goods imported into Pakistan, irrespective of destination.
2. Additional Tax for Non-Registered Persons
Where taxable supplies are made to persons who are not registered or not active taxpayers, an additional tax of 4% will apply on the value of supplies, in addition to the standard rate.
3. Special Provisions for Tenth Schedule Goods
Certain goods listed in the Tenth Schedule are subject to alternative methods of taxation:
o Production capacity-based tax for industries where output can be calculated through plant and machinery capacity.
o Fixed-rate tax where businesses are positioned to collect a pre-determined amount due to the nature of operations.
Interactive Breakdown of Sales Tax Rates
Schedule Type Tax Application Method
Third Schedule Tax at 18% of retail price (or rates in Eighth Schedule)
Eighth Schedule Special rates with conditions as notified by FBR
Tenth Schedule Capacity-based or fixed-rate collection
Eleventh Schedule Digital supply transactions and e-commerce taxation
Impact on Businesses and Imports
The revised framework ensures uniform application of sales tax across multiple sectors, including manufacturing, retail, and digital commerce. Importers are required to pay tax at designated rates upon entry of goods, while domestic suppliers must ensure compliance with labeling and retail price regulations.
E-commerce platforms and payment gateways have also been brought under the tax net, making them liable for collection and deposit of tax on digitally ordered goods.
What Stakeholders Should Do
• Manufacturers should review the Third and Eighth Schedules for specific product rates.
• Importers must ensure compliance with retail price embossing requirements.
• E-commerce businesses should upgrade systems to track and remit taxes digitally.
Disclaimer
The information provided is for reference only and does not constitute financial or legal advice. For detailed guidance, businesses should consult tax professionals or refer to official FBR notifications.