Govt removes 18pc sales tax on shipping

ISLAMABAD: The federal government has withdrawn the 18% sales tax on the shipping sector in the budget for 2026-27, a step that Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry said would support the country’s maritime and logistics industries.

In a statement, the minister said the tax removal addressed a long-standing demand of stakeholders and would make Pakistan’s maritime services more competitive. He said the measure was expected to ease trade activity by bringing down transport and logistics expenses.

The minister said lower costs would help importers and exporters, improve the business climate for maritime enterprises and encourage new investment in the sector. He also linked the decision to the broader development of the blue economy, saying it would help local shipping services expand and strengthen Pakistan’s maritime capacity.

Chaudhry said reduced operating expenses should also improve supply-chain efficiency and enhance the position of Pakistani businesses in international trade. According to the minister, the budget move is also expected to stimulate employment and economic activity in connected areas such as port operations, logistics and maritime services.

He said the tax relief could encourage stronger private-sector participation in efforts to modernise maritime infrastructure and increase trade-handling capacity. The minister welcomed the budget decision and said it had the potential to increase the shipping sector’s contribution to the national economy.

Industry organisations have for years argued that heavy taxation and high operating costs were holding back the development of Pakistan’s shipping industry. The minister said the latest budget measure responded to those concerns and could help improve the sector’s long-term growth prospects.

Referring to the expected impact of the decision, Chaudhry said: "The abolition of the 18% sales tax will facilitate trade by lowering transportation and logistics costs."