The Federal Board of Revenue (FBR) has proposed a major expansion in taxation under Budget 2026-27, targeting a wide range of household goods, food items and retail products in an effort to boost revenue collection.

According to official sources, the government has set a tax revenue target of Rs15.264 trillion for the upcoming fiscal year. To achieve this goal, around Rs650 billion in additional tax measures have been proposed, including nearly Rs150 billion in new tax initiatives.

Under the proposed plan, sales tax will be imposed on hundreds of items sold in retail packaging. Essential food products such as milk, infant formula and other dairy-based items are included in the list of taxable goods.

The budget also proposes an 18 percent general sales tax (GST) on ghee, edible oil, sweets, pasta and various sauces, potentially increasing prices of daily food essentials.

A broad range of non-food household items will also come under the tax net. These include plastic kitchenware, storage items, pesticides, cleaning products, crockery, bathroom fittings, sanitary ware and other home-use goods. Bags, suitcases and travel accessories are also expected to become more expensive.

All types of footwear have been brought under the sales tax regime, while retail sales of automobiles and accessories will also face taxation. Luxury SUVs priced between Rs20 million and Rs30 million will be subject to a 30 percent tax, while vehicles above Rs30 million will face a 40 percent tax.

Additional measures include a 5 percent tax on purchases from unregistered suppliers, while the tax rate for distributors has been increased from 0.25 percent to 0.50 percent. Commercial importers selling goods sourced from imported raw materials will also face a 3 percent tax.

Officials say these measures are part of broader efforts to widen the tax base and strengthen fiscal stability, though concerns remain over their potential impact on inflation and household budgets.