Beverage Industry Wants Govt to Remove Duty

The beverage sector has submitted a joint letter to the government asking for the removal of the 10% Federal Excise Duty (FED) through the Finance (Supplemental) Bill 2023.

The letter, signed by the CEOs of seven firms, including local and global companies such as Citropak, Shakarganj, Haleeb Foods, PepsiCo, Nestle Pakistan, Shezan, and Top Foods, highlights the importance of the formal juice sector in supplying customers with nutritious fruit beverages and juices.

The sector generates about Rs. 59 billion in yearly revenue and employs over 5,000 people along the supply chain, with an estimated budget of Rs. 40 billion.

Regrettably, the application of a 5% FED on fruit drinks in 2019 resulted in a 23% decrease in industry size in 2019-20, a significant four-fold effect.

As a result, any increased tax (FED) on fruit beverages and juice products will cause a reduction in business volume, negatively impacting revenue collection in 2019-20.

The beverage business is now witnessing strong momentum with the elimination of the 5% FED in June 2021, and any tax diversion at this time would upset this expanding market once again.

Therefore, the letter continues by encouraging the government to revoke the 10% FED on juice since such actions have harmed the business and, as a result, the local economy and government tax collection.