In a move that could impact the agricultural sector, the federal government is planning to raise the sales tax on tractors from 10% to 14%. This proposed tax hike comes after the government withdrew a previous sales tax exemption on tractors in the last budget (2024-25) and imposed a 10% sales tax. Sources within the Federal Board of Revenue (FBR) have revealed that the tax authority has recently held a meeting to discuss this matter. The FBR has now completed a proposal to increase the sales tax on tractors from 10% to 14%. The tax department will implement the increase in sales tax after receiving approval from the Cabinet. The finance ministry has already forwarded a summary regarding this proposal to the Cabinet, the sources added. They further explained that the rationale behind raising the sales tax to 14% is that the 10% input tax is not being fully consumed. Meanwhile, the standard sales tax rate is 18%, resulting in refunds being generated for the tractor industry. To address this issue of refunds, the proposal to increase the sales tax on tractors is under consideration.