By Ali Imran
ISLAMABAD: Federal Minister for National Food Security and Research Rana Tanveer Hussain has said that the government is committed to balancing public health objectives, social protection and economic growth simultaneously. He was speaking at a pre-budget consultation organized by the Fruit Juice Council here on Tuesday.
Endorsing the fruit juice industry’s demand for reduced taxation on fruit-based and no-added-sugar beverages, the minister said excessive taxation is hurting production, investment and exports, thus value-added products should be encouraged to enhance the competitiveness of Pakistan’s juice sector in international markets.
He observed that reducing the tax burden on value-added products could improve competitiveness and help the beverage sector expand its export footprint.
“Our exports can only grow through better quality and competitive products. Value-added products must be encouraged,” he said, adding that the government would consider measures to support productive sectors despite fiscal constraints.
The participants unanimously suggested reducing the existing 20 per cent FED on fruit juices to 10 per cent and exempting no-added-sugar beverages from FED altogether.
They argued that such measures would encourage healthier consumption patterns, support farmers, stimulate investment, boost exports and contribute to sustainable economic growth.
Dr Abid Qaiyum Suleri, the Executive Director of Sustainable Development Policy Institute (SDPI), said that if taxes on sugary beverages are intended to improve public health, the policy should distinguish between healthier and less healthy products. He suggested that beverages with lower added sugar and higher fruit content should face lower tax rates.
“Taxation should incentivize healthier choices. Products with no added sugar or higher fruit content should be treated differently from beverages with high sugar levels,” he said.
Dr. Suleri also proposed that revenue generated through health-related taxes should be transparently allocated to healthcare spending, allowing the public to see direct benefits from such measures.
Representatives of the Fruit Juice Council called for a rationalized regime for fruit juices and no-added-sugar beverages, arguing that the high Federal Excise Duty (FED) has been harming the fruit juice industry, discouraging innovation and negatively affecting farmers and exports.
Waqar Ahmed, representing the Fruit Juice Council, said that there should be zero per cent FED on the no-added-sugar category.
He argued that a beverage containing 100 percent added sugar should not be taxed at the same rate as a fruit juice with high fruit content. He said the industry had consistently advocated a differentiated taxation system that recognizes the nutritional value and fruit content of juice products. He noted that many juice products contain between 05 per cent to 100 per cent fruit content and are manufactured under strict food regulations, unlike many informal-sector products.
He warned that maintaining a uniform 20 per cent FED would discourage companies from launching innovative products such as no-added-sugar juices. “If no-added-sugar juice products are subjected to the same tax as high-sugar drinks, investment and innovation in healthier products will suffer,” he said. He highlighted that the formal fruit juice sector’s turnover had declined from around Rs 60 billion to nearly Rs 40 billion due to the successive increases in FED.
Zainab Naeem, Head of Ecological Sustainability and Circular Economy Unit at SDPI, said it is essential to rationalize FED on sugary drinks based on added sugar content percentage. “For example, she said, if carbonated drinks have 100% sugar and a fruit juice with 20% sugar then a uniform FED will be detrimental for the fruit juice industry. It will also discourage industry to launch innovative products like non-sugar-added juices, if the same FED gets imposed on those products then it will impact revenue and industry growth,” she maintained.
Aatekah Mir Khan, speaking on behalf of the Fruit Juice Council, said the council’s member companies account for approximately 75 per cent of the country’s formal juice market. She highlighted that the industry supports a large value chain comprising farmers, fruit processors, manufacturers and distributors. She added that as per industry estimates, around 58 per cent of the value generated within the sector is distributed among various stakeholders across the supply chain, while nearly 42 per cent of the retail price of a juice pack is attributable to taxes.
She warned that excessive taxation on juice products could push consumers towards cheaper, unregulated beverages. Such products often contain artificial colours, excessive sugar and other potentially harmful ingredients without adequate quality controls.
Nadia Tahir an economic expert also stressed the need for the industry to focus on export growth, quality enhancement and regulatory compliance to unlock Pakistan’s substantial untapped potential in processed fruit exports.
