Overview
- Economists and industry writers urge the government to expand the Third Schedule so sales tax is charged on a printed retail price and collected at manufacture or import for items like cooking oil, milk and dairy, flour, frozen foods, condiments and infant formula.
- Pakistan’s GST now leans on retail collection in a market where most shops are off the books, so extra charges on unregistered and non-filer retailers—4 percent further tax plus about 2 percent advance income tax—often fall on compliant manufacturers or shoppers instead.
- Business reporting says the current setup lets tax evaders undercut formal brands by as much as a quarter in price, which pushes market share toward informal players and leaves documented firms paying more to stay on shelves.
- Writers note the Third Schedule already covers goods such as water, biscuits, tea, spices, soaps and shampoos, with upfront collection from a market valued at over Rs2.5 trillion, and say adding more packaged essentials would cut leakages and simplify enforcement.
- Proponents add that printing the final price on packs protects buyers from arbitrary markups in small towns and low-competition areas, while policy analysts caution this fix should be paired with digital, invoice-based reforms for a lasting, well-documented tax chain.