The Fruit Juice Council (FJC), representing Pakistan’s formal juice industry, strongly urges the government to revise the Federal Excise Duty (FED) on fruit juices, reducing it from the current 20% to 15% in the upcoming fiscal year. This step is essential if the government intends to exceed last year’s revenue figures from the sector.
The present FED of 20%, imposed in addition to an 18% General Sales Tax (GST), has significantly stalled the growth of the juice industry. As a result, revenue projections for FY2024–25 fell short of expectations — a clear signal that the industry has reached the Laffer Curve threshold, where excessive taxation leads to declining sales and reduced tax income.
According to local regulations:
• Fruit drinks contain a minimum of 5% fruit content
• Nectars contain between 25% to 50%
• Pure juices are made from 100% fruit content
These beverages are a healthier alternative to sugary drinks, offering natural nutrients and the goodness of real fruits. Their nutritional value is recognized by both the Punjab and Sindh Food Authorities, which permit only fruit-based beverages to be sold in educational institutions, while banning all other categories of drinks.
The steep decline in sales has also had a direct impact on fruit procurement. In 2023–24, the industry sourced just 20,233 tons of mangoes, a sharp drop compared to 31,000 tons in 2017–18, hurting both local fruit farmers and pulp processors.
While the government continues to express its commitment to promoting a documented economy, its current tax policies are undermining this goal. The excessive FED is driving consumers toward cheaper, lower-quality, and potentially unsafe products sold by the undocumented sector, which continues to expand.
Adding to the industry’s challenges, the recent budget proposal to reduce allowable chilling charge deductions from 10% to 5% will only further increase the financial burden on manufacturers.
Rather than easing pressures, the government is placing additional strain on an already struggling industry. FJC calls upon the government to:
• Reduce FED on fruit juices from 20% to 15%
• Withdraw the proposed reduction in chilling charge deductions
Supporting the formal juice industry not only protects consumer health and local agriculture but also ensures a more sustainable and documented revenue stream for the national economy.
