Govt mulls up to 50pc tax hike on food items in budget 2025-26
The prices of several food items, including popular beverages and processed edibles, are likely to surge by up to 50 per cent in the upcoming federal budget 2025-26.
Sources within the Federal Board of Revenue (FBR) said that a significant rise in federal excise duty (FED) is under consideration for sweetened beverages, including soft drinks, juices, and carbonated soda water. The proposed duty is expected to increase from the current 20 per cent to 40 per cent.
The proposal includes products containing additional flavouring agents or artificial sweeteners, a move aimed at discouraging consumption of sugar-rich and non-essential food items. Syrups, squashes, and carbonated water made from fruit juice or pulp are also likely to fall under the revised tax net.
FBR officials further revealed that a new 20 per cent tax may be imposed on various industrially produced dairy-based products. This includes milk-based items that are processed and packaged for commercial sale.
Moreover, meat products such as sausages, as well as dried, salted, or smoked meat, are expected to witness a price hike due to proposed revisions in tax slabs.
A sweeping increase in taxes—reportedly up to 50 per cent—is also on the cards for a range of processed foods, including chewing gum, chocolates, candy, caramels, pastries, biscuits, cornflakes, and other cereals. Bakery items are also likely to be affected by the increase.
