Maritime minister says tax relief will cut logistics costs, attract investment and strengthen Pakistan’s blue economy
ISLAMABAD: Pakistan has abolished the 18 per cent sales tax on the shipping industry under the federal budget for 2026-27, a move aimed at reducing logistics costs, encouraging investment and enhancing the competitiveness of the country’s maritime sector.
Welcoming the decision, Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry described the tax exemption as a significant step towards strengthening Pakistan’s maritime and logistics industries.
“The abolition of the 18 per cent sales tax will facilitate trade by lowering transportation and logistics costs,” the minister said in a statement, noting that the measure fulfils a long-standing demand of stakeholders in the shipping sector.
Boost for maritime investment
According to the minister, the removal of the tax burden is expected to create a more attractive environment for domestic and foreign investors seeking opportunities in maritime services and shipping operations.
He said the initiative would help reduce the cost of doing business for importers and exporters while supporting the growth of local shipping companies and maritime enterprises.
The government expects the measure to encourage fresh investment in shipping, logistics and related infrastructure, contributing to the broader development of Pakistan’s maritime economy.
Lower costs to improve trade competitiveness
Junaid Chaudhry said reduced operational costs would improve supply-chain efficiency and strengthen the competitiveness of Pakistani businesses engaged in international trade.
Industry participants have long argued that high taxation and operational expenses hindered the growth of the shipping sector, limiting its ability to compete effectively in regional and global markets.
The tax relief is expected to lower transportation costs and improve the efficiency of trade-related services, providing benefits across the import and export sectors.
Support for blue economy and employment
The minister said the decision would also contribute to the expansion of Pakistan’s blue economy by creating a more business-friendly environment for maritime activities.
He noted that increased investment and sectoral growth could generate employment opportunities in shipping, logistics, port operations and other related industries.
The measure is also expected to encourage greater private-sector participation in efforts to modernise maritime infrastructure, expand trade capacity and improve the overall efficiency of Pakistan’s ports and logistics network.
Industry welcomes relief
Industry stakeholders have repeatedly called for tax reforms to support the development of Pakistan’s shipping industry, arguing that excessive taxation has constrained growth and investment.
Welcoming the budgetary measure, the maritime minister said the abolition of the sales tax could significantly enhance the sector’s contribution to the national economy while strengthening Pakistan’s maritime capabilities and trade competitiveness.
The decision forms part of the government’s broader strategy to facilitate business activity, promote investment and support economic growth through targeted fiscal reforms in Budget 2026-27.