The federal budget 2025-26, presented on Tuesday, is set to impact the everyday lives of citizens, with significant price hikes expected across a wide range of products and services. The increase is mainly due to new taxes, levies, and duties proposed in the budget.
According to official sources, while some sectors may receive tax relief, many essential and luxury goods are expected to become costlier.
Items Expected to Become More Expensive After Budget 2025-26
Petroleum & Fuel
- Petroleum levy increased: Diesel and petrol to see an added levy of up to Rs 80 per litre.
- High Octane & E-10 Petrol: Prices to rise from Rs 50 to Rs 75 per litre.
- 6% General Sales Charge (GSC): Imposed on petrol, diesel, and related fuels.
Imported Electronics & Vehicles
- 10% Sales Tax on imported laptops, PCs, notebooks, and electronics.
- Higher Withholding Tax on Mobile Phones: Devices over $500 (e.g., iPhones) to be taxed with 18% GST and up to 25% PTA levy.
- End of Duty Concessions: Hybrid, electric, and luxury imported vehicles to see steep price hikes.
Food & Essential Items
- 10% Sales Tax on bakery items like vermicelli, sheermal, buns, rusks, poultry and cattle feed, books, and newsprint.
- Federal Excise Duty (FED) on:
- Sugar: Rs 15/kg.
- Cement: Increase from Rs 2 to Rs 3 per kg.
- Additional Taxes on UHT milk, ghee, oil, and flour.
- 5% Withholding Tax on flour mills, pushing flour prices up.
- Imported Fruits (dried & fresh) to lose tax exemptions.
Consumer & Textile Goods
- GST Increase to 18% for Tier-1 retailers of branded leather and textile items.
- 10% Sales Tax on stationery, newsprint, and books.
- Higher Taxes on Cosmetics: Including soaps, shampoos, lotions, and perfumes.
Agricultural Inputs
- 10% Sales Tax on local poultry and cattle feed.
- 15% GST on fertilizers, seeds, tractors, and other agri-related inputs.
Other Major Tax Changes
- Sales Tax on Locally Made Vehicles: Raised from 12.5% to 18%.
- Tax Exemptions for FATA Ended: A 12% tax to be imposed.
- New Taxes on Freelancers & Social Media Income: Includes foreign income and digital earnings.
- Capital Gains Tax on Real Estate: Set to rise.
- Excise Duty on Real Estate: Likely to be removed.
- Super Tax on Large Companies: May be slightly reduced.
- Tax Relief for Construction Sector: Including lowered or abolished withholding tax on imported raw materials.
- Customs Duty on select imported items may reduce by 2-3%.
The Federal Budget 2025-26 is a mixed bag. While offering relief to some sectors like construction and local industries, it brings added burden for consumers through higher taxes on fuel, food, electronics, and other essentials. The coming weeks are likely to see a ripple effect in market prices nationwide.
