The government has abolished the 18% sales tax on the shipping industry in the FY2026-27 federal budget, a move aimed at enhancing the competitiveness of Pakistan’s maritime sector and reducing the cost of trade and logistics.

Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry welcomed the decision, describing it as a significant policy measure that addresses a long-standing demand of industry stakeholders and supports the growth of maritime and logistics services.

According to the minister, the withdrawal of the sales tax is expected to lower operational and transportation costs for businesses, improve supply chain efficiency, and create a more conducive environment for investment in the shipping sector.

He noted that the tax relief would encourage both domestic and foreign investment, strengthen the country's maritime infrastructure, and support the expansion of local shipping companies. The measure is also expected to enhance the competitiveness of Pakistani exporters by reducing logistics-related expenses.

The government believes the initiative will contribute to the development of Pakistan’s blue economy by fostering greater private-sector participation in maritime services, port operations, and logistics activities.

Industry participants have consistently highlighted high taxation and operating costs as key challenges limiting the growth of the shipping sector. The latest budgetary relief is expected to address some of these concerns and improve the overall business environment for maritime enterprises.

Officials further expect the measure to generate economic activity across allied industries, create employment opportunities, and increase the shipping sector’s contribution to the national economy.

The tax exemption forms part of broader efforts to strengthen Pakistan’s trade infrastructure, improve logistics efficiency, and position the country as a more competitive regional trade and transit hub.