27/06/2026
*CAP warns Third Schedule expansion will overtax consumers*
The Chainstore Association of Pakistan (CAP) has expressed serious concern over the proposed inclusion of non-FMCG items, including everyday footwear, school backpacks, bags, wallets and other PCT 42.02 goods, in the Third Schedule of the Sales Tax Act, 1990, warning that the measure will raise prices by taxing consumers on notional retail prices instead of actual transaction values.
CAP, representing tax-compliant Tier-1 retailers, has consistently supported formalisation and broadening of the tax base. However, Third Schedule treatment for price-variable, retailer-led categories will overtax consumers and place pressure on documented retailers and manufacturers.
Public reports estimate that the proposed expansion through the Finance Bill 2026 will generate between Rs 50 billion and Rs 91 billion, indicating the scale of cost that is likely to be reflected in higher prices for end customers, while informal operators selling undocumented or smuggled goods will gain a price advantage.
