The federal government is set to broaden the list of luxury goods subject to higher taxation in the upcoming 2025-26 budget, insiders at the Federal Board of Revenue (FBR) revealed.

A 25% sales tax will be imposed on the import and local supply of additional luxury items. This will be enacted through amendments to SRO 297(I)/2023 via the Finance Bill 2025.

Sources indicate that a new schedule may also be added to the Sales Tax Act to officially implement these changes.

🔹 Newly Taxed Items May Include:

• High-end home appliances
• Premium tiles & wallpapers
• Luxury watches

The move aims to boost revenue and offset anticipated declines in customs duty, regulatory duty, and additional customs duty.

Currently, luxury goods subject to higher taxes include aircraft, ships, jewelry, cosmetics, cigarettes, high-end mobile phones, imported food items, decorative products, and select vehicle types.

Stay tuned for further updates on Pakistan’s FY26 budget and its impact!