LAHORE: The formal packaged juice industry has urged the government to reduce the Federal Excise Duty (FED) in the upcoming federal budget, warning that the current tax structure is severely harming the sector.
Introduced in 2023 at a rate of 20 percent, the FED, combined with an 18 percent General Sales Tax (GST), has increased the overall tax burden on packaged juice to approximately 42 percent of the retail price, according to a spokesperson for the Fruit Juice Council.
The sector, which had anticipated sales exceeding Rs72 billion in fiscal year 2023, experienced a sharp 45 percent decline to Rs42 billion. This drop has not only stalled industry growth but also led to a significant shortfall in government revenue projections for the current fiscal year.
The high tax burden has reduced consumer affordability, pushing buyers towards the undocumented juice market, which offers cheaper but lower-quality and potentially unsafe products that evade tax payments.
The industry warns that the decline in demand for formal sector products has negatively impacted the rural economy, particularly fruit farmers, with the sector previously sourcing over 100,000 tonnes of fruit annually from local growers.
