ISLAMABAD: The federal government has taken back its tax reduction, which applied 18 percent general sales tax to imported sugar.
The tax reduction was created to help maintain domestic sugar supplies while keeping prices stable. The existing 0.25 percent sales tax rate has now been eliminated, according to notifications.
The 18 percent sales tax rate will begin on April 22, 2026, according to the latest announcements. The rollback comes after a sharp increase in sugar imports during the current fiscal year.
Data from the Pakistan Bureau of Statistics showed that sugar imports surged by more than 7,900 percent in the first seven months, reaching over $17.46 million compared to just $211,800 in the same period last year.
The government-approved plan allowed the Trading Corporation of Pakistan to import sugar under a concession that had been granted to it in August 2025.
The earlier relief allowed the import of 500,000 tons of sugar at a significantly lower tax rate to address supply shortages and rising prices in the domestic market.
The authorities now plan to end the tax concession according to their latest decision. The total value of imports reached $23.4 million in January 2026. The surge in imports indicates that the earlier tax concession played a key role in boosting supply through international purchases.
The total food import costs have increased, while food imports increased 19.26 percent from July to January, reaching more than $5.5 billion.
The major contributors to this increase included palm oil, tea, and dried fruits, which demonstrate that economic pressure continues to exist.
