FBR extends tax exemptions on sugar imports until November 30, 2025

The Federal Board of Revenue (FBR) announced on Monday that it had extended the deadline for the exemption of customs duties, sales tax, and withholding taxes on the import of sugar by the Trading Corporation of Pakistan (TCP) until November 30, 2025.

The FBR’s decision applies to the import of up to 500,000 metric tons of sugar and follows the amendments made to three key notifications—SRO 1215(I)/2025, SRO 1216(I)/2025, and SRO 1217(I)/2025. 

The new exemption period will allow the TCP to continue importing sugar without incurring the full customs duty, sales tax, and other taxes that typically apply to sugar imports.

The amendments include:

1. Customs Duty Exemption: Customs duty on sugar imports has been waived entirely.
2. Sales Tax Reduction: The sales tax rate has been reduced from 18% to just 0.25% on sugar imports.
3. Withholding Tax Reduction: The withholding tax has been lowered to 0.25% for imported sugar.

The government has also exempted a three percent minimum value-added tax (VAT) on the import of up to 500,000 metric tons of sugar. These measures result in an effective 47% reduction in taxes and duties on sugar imports, compared to the usual 47.5%, which includes 20% customs duty, 18% GST, three percent VAT, and 6.5% income tax.

This move is expected to facilitate sugar imports, which are crucial for domestic supply, especially in times of market volatility or shortfall. 

The FBR confirmed that the import of sugar under these terms must be conducted by the TCP or the private sector and will be subject to conditions set by the Commerce Division, including quality assurance through an international inspection firm.

The FBR has also highlighted that the extended deadline for tax exemption will apply only to imports made before November 30, 2025, allowing stakeholders in the sugar supply chain to take advantage of these financial incentives.