Islamabad, April 29, 2025 – In a major policy development, the Federal Board of Revenue (FBR) has officially announced a new method for determining the value of cement for the purpose of sales tax calculation, aligning it with the Sensitive Price Indicator (SPI) data issued by the Pakistan Bureau of Statistics (PBS).
The decision, notified through SRO 746(I)/2025, mandates that the minimum retail price of cement will now be calculated based on the average national retail prices published by PBS under its weekly SPI report. These values will be assessed twice each month—using SPI data released just before the 1st and 16th—and applied to the corresponding fortnightly periods starting on those dates.
According to the FBR, this updated valuation mechanism will be implemented from May 1, 2025, and will serve as the standard for calculating sales tax at the prescribed rate mentioned under clause (a) of sub-section (2) of Section 3 of the Sales Tax Act, 1990.
This policy shift comes in the wake of a significant price hike in the cement sector. As of April 24, 2025, the average price of a 50-kilogram cement bag surged to Rs1,410, marking a sharp 16% year-on-year increase compared to Rs1,217 reported during the same period in 2024. With Pakistan maintaining a uniform general sales tax rate of 18%, the revised valuation formula is expected to increase the tax burden on consumers, directly linked to the rise in cement prices.
The FBR has previously implemented similar mechanisms for other essential commodities. For example, through SRO 577(I)/2025 issued on April 8, 2025, the board revised the sales tax valuation method for domestically produced white crystalline sugar by tying it to SPI data as well.
This move is part of FBR’s broader strategy to streamline tax collection and minimize underreporting in sectors known for price volatility. By aligning tax valuation with independently monitored market indicators like the SPI, the FBR aims to bring greater transparency and uniformity to sales tax assessments—particularly in price-sensitive sectors like cement.