The federal government has decided not to extend the sales tax and income tax concessions that are set to expire on June 30, 2026, sources said on Monday.

Starting July 1, all relevant sectors, goods, and industrial inputs will be subject to applicable taxes, the sources added.

The Ministry of Finance’s Tax Policy Unit and the Federal Board of Revenue (FBR) have reviewed all existing tax exemptions and concessions in this regard.

According to the sources, the government has been bearing substantial revenue losses due to tax waivers, preferential rates, zero-rating, import incentives, and other special tax facilities.

The sales tax rate on imports and industrial supplies in the former tribal areas (FATA and PATA) will be increased from 10% to 12%.

Meanwhile, several tax incentives previously granted to the electric and hybrid vehicle sector will also expire on June 30, 2026 and will not be extended.