The federal government is set to expand the list of luxury goods and impose a higher sales tax on them in the upcoming Budget 2025–26, according to sources within the Federal Board of Revenue (FBR), as reported by ProPakistani.
A 25% sales tax is expected to be applied on both the import and local supply of these newly added luxury items. This tax revision will be enacted through an amendment to SRO 297(I)/2023 via the Finance Bill 2025.
Sources further revealed that a new, separate schedule may be introduced within the Sales Tax Act to support and formalize this policy shift.
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The expanded list is likely to include more home appliances, premium tiles and wallpapers, and luxury watches. Officials explained that this initiative aims to boost revenue collection, especially in light of expected losses from planned reductions in customs duty, regulatory duty, and additional customs duty.
Currently, the list of luxury items already taxed includes aircraft, ships, jewelry, cosmetics, cigarettes, high-end mobile phones, imported food products, decorative items, and certain luxury vehicles.
