ISLAMABAD: The federal government is planning to introduce a five percent Federal Excise Duty on ultra-processed foods in the upcoming budget, aiming to collect Rs250 billion in indirect tax revenue, according to reports citing Federal Board of Revenue (FBR) sources.
More than 50 types of ultra-processed food items may be impacted by this proposed duty, including carbonated drinks, frozen foods, instant noodles, biscuits, ice cream, sausages, sauces, and ready-made meals.
According to officials, this tax initiative would be the most significant in terms of indirect revenue generation and reflects a broader strategy to widen the excise duty base amid fiscal tightening.
The proposal to impose Federal Excise Duty on ultra-processed foods is still under review and is expected to be a key component of the upcoming federal budget. If approved, it could alter consumer pricing and affect a wide range of processed food producers and retailers.
The government aims to enhance revenue collection by targeting high-demand consumer goods. The FBR and Ministry of Finance are working jointly to finalize the list of taxable items and to evaluate the overall economic impact.