The federal government has withdrawn the 18% sales tax on Pakistan’s shipping industry under the Budget 2026-27, a move aimed at lowering logistics costs, encouraging investment, and strengthening the country’s maritime sector.

The tax exemption, announced as part of broader economic reforms, fulfills a long-standing demand of shipping companies and other industry stakeholders.

Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry welcomed the decision, saying it would enhance the competitiveness of Pakistan’s maritime services and support the expansion of domestic shipping operations.

According to the minister, the removal of the tax will reduce transportation and logistics expenses for businesses, making trade more efficient and improving supply-chain performance across multiple sectors.

He said lower operating costs are expected to encourage fresh investment in shipping, port services, warehousing, and other related industries.

Chaudhry added that the measure would contribute to the growth of Pakistan’s blue economy by creating a more business-friendly environment and generating economic activity linked to ports, logistics networks, and maritime services.

Industry experts believe the tax relief could help Pakistan reduce its reliance on foreign shipping companies and increase the share of locally operated vessels in regional trade.

The government expects the move to attract greater private-sector participation, accelerate maritime infrastructure development, and increase the shipping sector’s contribution to the national economy.

The announcement comes as Pakistan seeks to improve trade competitiveness and unlock the economic potential of its coastline and ports.