Budget 2025–26: Cosmetics and Personal Care Products May Get More Expensive in Pakistan

As Pakistan gears up to announce its Federal Budget 2025–26, economists and citizens alike are preparing for a wave of new taxes and price hikes. One category that’s likely to be directly affected is cosmetics and personal care products. These items, often seen as luxury or non-essential by policymakers, are likely to face increased import duties, sales taxes, and regulatory levies.

What Falls Under This Category?

Cosmetics and personal care items include a wide range of products such as:

• Makeup (foundation, lipstick, eyeshadow, etc.)
• Skincare products (moisturizers, cleansers, sunscreen)
• Hair care (shampoo, conditioner, hair color)
• Perfumes and body sprays
• Imported beauty products and grooming tools

Why Are Prices Expected to Rise?

Here are the key reasons why these products may become more expensive in the new budget:

1. Higher Import Duties

A large portion of beauty products in Pakistan are imported. To curb the import bill and protect local manufacturers, the government is expected to:

• Increase customs duties on imported cosmetics.
• Impose regulatory duties on non-essential beauty items.

2. Increased Sales Tax

Currently, cosmetics are subject to standard sales tax. In the 2025–26 budget, the government may:

• Raise General Sales Tax (GST) on cosmetics from 18% to possibly 20% or more.
• Apply additional taxes on high-end or luxury brands.

3. IMF-Driven Revenue Goals

Under IMF pressure, Pakistan must boost tax revenue. Since cosmetics are considered non-essential goods, they are often taxed more heavily without facing public backlash compared to essentials like food or medicine.

Who Will Be Most Affected?

This price hike will directly impact:

• Women and youth, who are the primary consumers of cosmetics.
• Salons, spas, and beauty businesses, which rely heavily on branded personal care items.
• Middle-class buyers, who may no longer afford quality or imported products.

Possible Market Impact

• Local brands might see a rise in demand as customers shift from imported products.
• Smuggling and black market sales of branded cosmetics could increase.
• Overall consumer spending on beauty products may drop, affecting retailers and small businesses.

Public Response and Concerns

Many people believe that such taxes unfairly target women and professionals in the beauty industry. There’s also concern that:

• Small salon owners may lose clients due to high service costs.
• Quality of available products may decrease if imports become unaffordable.

Conclusion

The expected tax hikes on cosmetics and personal care items in Budget 2025–26 reflect the government’s strategy to generate revenue by taxing lifestyle and luxury segments. However, this move may also burden millions of ordinary consumers, particularly women, who view personal care as a necessity, not a luxury.