FBR has proposed changes to the minimum tax system for wholesalers, distributors, dealers, and sub-dealers under the Finance Bill 2026.
According to the proposal, the minimum tax rate under Section 113(1) of the Income Tax Ordinance, 2001 will be revised to 0.5% for businesses involved in the supply and distribution of several important consumer products. These include packaged food items, fertilizers, sugar, electronics, and locally manufactured mobile phones.
The proposed changes are part of the government’s efforts to improve tax collection and increase compliance within different sectors of the economy. Officials believe the revised tax structure will help strengthen revenue generation while bringing greater documentation to supply chain activities.
Businesses operating as intermediaries between manufacturers and retailers are expected to be affected by the new tax rate. These entities play a key role in distributing products across the country and form an important part of the supply chain network.
The government has clarified that the proposal does not introduce a new tax directly on consumers. However, officials acknowledged that businesses may adjust prices depending on market conditions and operating costs. As a result, some products could experience minor price changes, although the overall impact is expected to vary from sector to sector.
Tax experts say the proposal is intended to broaden the tax base and ensure that different segments of the supply chain contribute fairly to government revenue. They also note that the final impact on businesses and consumers will depend on how companies respond to the revised tax requirements.
If approved, the changes will become part of the new fiscal framework and will apply to businesses dealing in the specified categories of goods. The proposal remains subject to parliamentary review before final implementation.
