The federal government has reinstated the standard 18 percent General Sales Tax (GST) on imported sugar, formally ending a major tax concession that had been introduced last year to stabilize domestic availability and ease price pressures.

Official notifications confirm that the reduced GST rate of 0.25 percent on sugar imports has been withdrawn, with the full 18 percent tax taking effect from April 22, 2026. The concession was initially granted in August 2025 for sugar imports conducted by the Trading Corporation of Pakistan (TCP) under a government-approved supply management plan.

Under the earlier arrangement, authorities allowed the import of 500,000 tonnes of sugar at a sharply reduced tax rate to counter shortages and curb rising retail prices. The latest move marks a policy shift as the government moves back toward the normal taxation framework.

The decision follows a dramatic rise in sugar imports during the current fiscal year. Data released by the Pakistan Bureau of Statistics (PBS) shows sugar imports surged by more than 7,900 percent in the first seven months, reaching $17.46 million, compared with just $211,800 during the same period last year.

Import momentum strengthened further in January 2026, when sugar purchases climbed to $23.4 million, indicating sustained reliance on international supply. The surge suggests that the reduced tax regime significantly encouraged imports and helped expand domestic availability.

At the same time, Pakistan’s broader food import bill has continued to expand. Total food imports rose 19.26 percent during July–January, exceeding $5.5 billion, driven largely by higher purchases of palm oil, tea, and dried fruits, adding pressure on the country’s external account.

With import volumes rising and supply conditions improving, the restoration of the 18 percent GST signals a shift in government priorities—from emergency price stabilization toward revenue collection and fiscal consolidation.