Pakistan is set to enforce printed price and 18 percent sales tax on packaging of over 3,000 daily-use products from 1 July, as the federal government moves to close a major tax evasion loophole.
The government plans to shift 20 product categories into the Third Schedule of the Sales Tax Act. The measure is projected to generate Rs. 60 billion in additional sales tax revenue.
Currently, standard sales tax applies to these goods, but their exclusion from the Third Schedule allows manufacturers and retailers to evade payment.
Moving them to the Third Schedule will fix the 18 percent sales tax at the manufacturing stage, and companies will be required to print the price and tax amount on all product packaging.
The affected food items include packaged milk, yoghurt, cheese, milk cream, tea creamer, powdered milk, fat milk, infant formula, porridge, baby food, and food supplements.
Frozen products such as parathas, kebabs, and nuggets are also included, along with condiments including ketchup, mayonnaise, barbecue sauce, and pizza sauce.
Personal care products covered by the measure include toothpaste, toothbrushes, shaving cream, shaving foam, and shaving brushes. Pet food for cats and dogs will also fall under the new requirement.
The government is extending the Third Schedule to all home appliances as part of its budget campaign to curb tax evasion in the electronics market.
Items affected include LED televisions, refrigerators, washing machines, juicers, blenders, air conditioners, room coolers, fans, stoves, geysers, cooking ranges, and all gas appliances.
