ISLAMABAD: In a bold step to promote healthier lifestyles and tackle the growing burden of diet-related illnesses, the Government of Pakistan is planning to introduce a 20% health tax on junk food, including popular bakery and confectionery items, in the upcoming 2025-26 federal budget.
The initiative, spearheaded by the Ministry of Health, targets processed and ultra-processed food and beverage products widely consumed across the country. The goal is twofold: discourage unhealthy eating habits and generate additional revenue for public health initiatives.
Government’s Push for Healthier Choices
According to a report by Daily Jang, the proposed health tax is part of a broader strategy to combat rising rates of obesity, diabetes, and cardiovascular diseases in Pakistan. The move follows global trends where similar taxes have been introduced to reduce the consumption of sugary and fatty foods.
A comprehensive policy document titled “Sustainable Taxation Policy on Ultra-Processed Foods and Beverages for Public Health” has already been shared with key decision-makers, including the Ministry of Finance and the Federal Board of Revenue (FBR). The report is currently under review and is expected to shape fiscal decisions in the upcoming budget.
Tax Rate Hike on the Horizon
Beyond the initial 20% levy, the policy also proposes increasing the existing Federal Excise Duty (FED) on unhealthy products from 20% to 40%, with a long-term target of raising it to 50% by 2028-29. This gradual escalation is designed to further reduce the appeal and affordability of unhealthy food options over time.
Impact on Industry and Consumers
If approved, the new tax measures will significantly affect both the food industry and consumer behavior. Companies dealing in baked goods, processed snacks, sugary drinks, and confectioneries may face declining demand and increased compliance costs. On the consumer side, the price hike could encourage a shift towards healthier, home-cooked alternatives.
A Step Towards a Healthier Pakistan
Health experts and government officials alike view this move as a necessary intervention to curb the growing trend of lifestyle diseases and to lay the groundwork for a healthier population. Additionally, the tax revenue generated will likely be reinvested into public health programs, awareness campaigns, and better healthcare services.
