ISLAMABAD: Civil society organizations, medical associations, and patient groups in a post-budget press conference Wednesday welcomed the inclusion of several ultra-processed food products (UPPs) in the Third Schedule of the Sales Tax framework, making them liable to 18% sales tax. However, they expressed concern that healthy products such as unsweetened milk, lassi, and flour should not be taxed.
UPPs Proposed for Taxation
The UPPs categories proposed for tax in the finance bill include sugar confectionery, infant formula products, sauces and condiments, packaged pasta and noodle products, fruit and vegetable preparations such as jams and purees, and vegetables and oils sold in retail packaging.
Coalition Recommendations
The coalition described the decision—subject to approval of the Finance Bill—as encouraging, but recommended that the federal government make such decisions based on scientific evidence. They noted that the NOVA food classification system and WHO-recommended thresholds for salt, sugar, trans fats, saturated fats, and products containing any amount of non-sugar sweeteners provide a strong technical basis for taxation. Such an approach could help generate revenue for government while also delivering public health benefits.
Call for Higher Excise Duty on Sweetened Beverages
The coalition also urged the government to increase the Federal Excise Duty on all sweetened beverages, including sodas, packed juices, flavored milk, iced tea, coffee, squashes, and syrups to 40%, citing their significant contribution to Pakistan’s growing public health challenges. They noted that packaged juices, which are often stripped of natural fiber, can have metabolic effects similar to sugar-sweetened beverages. The resulting high glycemic load contributes to rising rates of type 2 diabetes and childhood obesity, placing an increasing financial burden on the public healthcare system.
