LAHORE – Fruit Juice Council (FJC) called on government to intervene and recommend the abolition of the 20% Federal Excise Duty (FED), along with the 18% General Sales Tax (GST), on packaged fruit juices in the upcoming Federal Budget 2024–25.
In formal letter, Council warned that the current tax regime is severely damaging the rural fruit economy, particularly in Punjab, while disrupting the value chain of pulping units and juice manufacturers, and threatening a potential export target of PKR 100 billion by 2028.
According to the Council, this sector has long served as a critical link between Pakistan’s agricultural base and its manufacturing sector, ensuring that locally grown fruits are processed, packaged, and delivered to consumers across the country in the form of hygienic, safe, and nutritious beverages. However, with the imposition of the 20% FED in the Annual Budget 2023–24, followed by the continued application of 18% GST, the industry has witnessed a steep downturn, with volumes plunging by 41% in just one year.
The Fruit Juice Council has urged that abolishing the 20% FED is now necessary to protect Punjab’s agricultural economy, as fruit farmers are already facing significant losses. These losses stem from a combination of reduced demand and widespread fruit spoilage, resulting from shrinking procurement by juice processors.
At the same time, pulping units—which serve as a key part of the value chain—are at serious risk of closure due to the downturn in industrial activity. Without immediate relief, the entire structure that supports fruit production, processing, and distribution may continue to unravel. The FJC comprises some of the most prominent players in the packaged juice industry, including Haleeb, Nestlé, PepsiCo, Popular, Shezan, and Tetra Pak.
These companies are fully compliant with both federal and provincial food safety regulations and have played a key role in expanding access to healthy fruit-based beverages for consumers nationwide. In 2022, members of the FJC recorded a combined turnover of approximately PKR 60 billion and together provided employment to over 10,000 people.
FJC representative Aatekah Mir Khan warned that the current taxation model is not only short-sighted but ultimately self-defeating. “A short-sighted approach to revenue collection is suffocating the juice, pulping, and packaging industries along with the farmers who rely on them,” she said. If left unaddressed, she cautioned, the burden will fall squarely on small-scale farmers, many of whom may be driven below the poverty line.
This would increase reliance on government support programs, creating a new strain on the very system that the tax was intended to benefit. While the high taxation model may have resulted in increased revenue for the government in the short term, the Council argues that such gains are not sustainable.
As industry volumes continue to decline, government collections from the sector are likely to fall as well. In contrast, the FJC maintains that scrapping the 20% FED could revive consumer demand, stabilize the entire fruit-to-juice value chain, and ultimately lead to increased government revenues from the second year onward. Beyond fiscal gains, supporting the industry means safeguarding rural livelihoods and minimizing post-harvest losses, ensuring that local fruit doesn’t go to waste, but finds its way to consumers in the form of safe, affordable nutrition.
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