LAHORE: As the country’s economic managers grapple with widening fiscal gaps and the need to spur industrial growth, the players in the packaged juice sector urge the government to reconsider the current tax regime, particularly the 20pc federal excise duty (FED) imposed on juices, in addition to the standard 18pc general sales tax (GST).

The industry insiders say this taxation structure has not only hampered the growth of the formal sector but has also failed to meet revenue expectations.

“The taxes — 20pc FED imposed in addition to the standard 18pc GST are on a very higher side. These must be reconsidered and reduced by the government with immediate effect in the Federal Budget 2025-26,” demands a senior executive at a leading juice manufacturer.

According to the industry figures, sales in the formal packaged juice sector have plummeted by 45pc since the imposition of the FED in the 2023-24 budget. Where the market was poised to exceed Rs72bn, actual sales have shrunk to around Rs42bn — a worrying contraction that is now reverberating across the wider fruit value chain.

“The tax has been counter productive,” the executive commented on the condition of anonymity.

“It has not generated the projected revenue and has instead created space for the informal sector, which is neither regulated nor taxed.”

With the consumers have been facing up to 42pc in cumulative taxes on a single pack of juice, affordability has become a major hurdle, pushing many toward cheaper, often inferior alternatives.

These products, largely sold by undocumented players, lack quality checks and fruit content, raising concerns about consumer health and safety.

Meanwhile, the formal industry’s capacity remains under utilised, resulting in job losses and a halt in new investments. The impact extends beyond urban markets.

Farmers, especially those supplying mangoes and other fruits for pulp production, have seen a dramatic decline in procurement. For instance, mango procurement fell to 20,233 tonnes last year from 31,000 tonnes in 2017-18, disrupting livelihoods in the rural economy and increasing post-harvest wastage.

Published in Dawn, June 14th, 2025