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- Food minister says excise duties should reflect sugar content and nutritional value
- Minister warns high taxes on formal industry may boost unregulated alternatives
KARACHI: Pakistan should adopt a more targeted approach to taxing beverages that takes into account sugar content, nutritional value and economic impact rather than applying a uniform excise duty across all products, Food Minister Rana Tanveer Hussain said on Tuesday, days before the government’s annual budget announcement.
The remarks come as policymakers prepare the federal budget for fiscal year 2026-27, expected on June 10, amid broader discussions on revenue generation, public health objectives and support for domestic industry.
Speaking at a policy consultation organized by the Sustainable Development Policy Institute (SDPI) in Islamabad, Hussain said the current Federal Excise Duty (FED) structure did not adequately distinguish between different categories of beverages and should be reviewed through an evidence-based approach.
“The current uniform FED regime does not adequately reflect the significant differences in sugar content, nutritional value and economic contribution across various beverage categories, and therefore calls for a more nuanced and evidence-based approach to taxation,” the minister said.
“Pakistan’s policy framework must carefully balance multiple objectives, including the protection of public health, the sustainability of domestic agriculture, the competitiveness of industry and the stability of government revenues,” he added. “These goals are not contradictory and can be pursued simultaneously through calibrated and rational policy design.”
Hussain said the formal juice industry supported agricultural value chains by purchasing locally grown fruit and creating income opportunities for farmers, transporters, processors and other rural workers.
He also warned that excessive pressure on documented industries could encourage consumers to shift toward unregulated products, raising concerns about food safety, consumer protection and revenue losses.
Hussain said Pakistan should examine international practices that link taxation to sugar content and nutritional composition, arguing that incentives for low-sugar and no-added-sugar products could encourage healthier consumer choices while promoting innovation within the food and beverage sector.
He said the government remained committed to pursuing public health, agricultural development, industrial growth and fiscal sustainability through what he described as balanced and evidence-driven policymaking.