Budget 2025-26: Government Plans to Increase Taxes on Sugary and Processed Foods
The Government of Pakistan is preparing to introduce higher taxes on sugary drinks and ultra-processed food items in the upcoming 2025–26 federal budget. This move is intended to reduce the consumption of unhealthy products and to raise additional revenue for the country.
Key Tax Changes Proposed in the Budget
1. Sugary Beverages:
- The Federal Excise Duty (FED) on sugary drinks like sodas, flavored juices, and other sweetened beverages is expected to increase from 20% to 40% in the 2025–26 budget.
- By 2028–29, the tax is expected to rise further to 50%.
2. Ultra-Processed Foods:
- A new 20% health tax is proposed on processed foods like sausages, candies, cakes, cereals, jams, frozen desserts, and snacks.
- Another 5% FED might be added to more than 50 ultra-processed food products, including:
- Chips
- Instant noodles
- Ice cream
- Biscuits
- Frozen meats
- Sauces
- Packaged meals
3. Industrial Dairy Products:
- A 20% tax could also apply to industrial dairy items such as milk, yogurt, cheese, and similar products.
4. Sweets and Bakery Goods:
- A gradual increase in taxes—up to 50%—is being considered for products like:
- Chewing gum
- Chocolates
- Caramels
- Pastries
- Biscuits
- Corn flakes
- Sweet breakfast cereals
Why Is the Government Doing This?
1. Health Reasons:
- These taxes are being proposed by the Ministry of Health to reduce the public’s intake of foods that are high in sugar and fat.
- The goal is to prevent serious illnesses such as obesity, heart disease, and diabetes.
2. Increase in Government Revenue:
- The government expects to collect extra income from these taxes, which could help support the healthcare system and other public services.
3. Following International Practices:
- Many countries around the world have already introduced similar taxes to promote healthier eating habits.
What It Means for You
If these proposals are approved, people in Pakistan will likely see price increases on common sugary and processed food items. The government
