IMF Urges End to Sales Tax Relief on Stationery, Educational Items Expected to Become Costlier

Islamabad: The International Monetary Fund (IMF) has reportedly called for ending the 10 percent sales tax exemption on stationery items, raising concerns that essential educational supplies may become more expensive.

According to official sources, discussions are underway in the Finance Bill 2026 to increase sales tax on stationery products to 18 percent. The proposed change could affect prices of commonly used school and office items such as notebooks, registers, pens, and pencils.

If approved, the new tax rate is expected to take effect from July 1, 2026, significantly increasing the tax burden on the stationery sector. Officials indicate that the move would nearly double the existing tax impact on these products.

The proposal is part of broader efforts under fiscal reforms being considered by the government, which include reducing tax exemptions in various sectors ahead of the upcoming federal budget 2026–27.

The IMF has reportedly approved the suggested increase, while final decision-making rests with the government during the budget approval process.

Economists warn that if implemented, the measure is likely to push up the cost of basic educational materials, potentially affecting students and low-income households the most.