Shipping tax removal to boost investment

Withdrawal of 18% sales tax meets longstanding demand of industry stakeholders

ISLAMABAD:

The federal government has abolished the 18% sales tax on the shipping industry in the 2026-27 budget, a move hailed by Federal Minister for Maritime Affairs Muhammad Junaid Anwar Chaudhry as a major boost for maritime and logistics sectors.

Chaudhry said the removal of the tax met a longstanding demand from industry stakeholders and would improve competitiveness of the country's maritime services.

"The abolition of the 18% sales tax will facilitate trade by lowering transportation and logistics costs," he said in a statement, adding that the measure would encourage investment in the maritime sector and support the growth of local shipping services. He stressed that the relief was expected to attract fresh investment, reduce the cost of doing business for importers and exporters and strengthen the blue economy by creating a more business-friendly environment for maritime enterprises. Lower operational costs, the minister noted, should enhance supply-chain efficiency and boost the competitiveness of Pakistani firms in international trade.

Chaudhry also emphasised that the move would spur employment and economic activity across related sectors including port operations, logistics and maritime services and would encourage greater private-sector participation in efforts to modernise maritime infrastructure and expand trade capacity.

Industry groups have long complained that high taxation and operational expenses constrained the development of Pakistan's shipping sector. The minister welcomed the budget decision, saying it could materially increase the sector's contribution to the national economy and bolster the country's maritime capabilities.