Pakistan’s Ministry of Health has proposed a 20% health tax on processed and ultra-processed food and beverages as part of a public health strategy to reduce unhealthy consumption and generate revenue for healthcare spending.
Pakistan’s Ministry of Health has proposed a 20% health tax on processed and ultra-processed food and beverages for the 2025–26 fiscal year. This initiative is part of a wider public health strategy aimed at reducing unhealthy food consumption and increasing healthcare funding.
A report titled “Sustainable Ultra Processed Food and Drinks Products Taxation Policy for Public Health” outlines plans to gradually raise the Federal Excise Duty (FED) on currently taxed items from 20% to 40% in the upcoming fiscal year, with a further increase to 50% by 2029. The tax would apply to a variety of products, including sausages, confectionery, bakery goods, and sugary drinks, which are often high in sugars, fats, and preservatives linked to non-communicable diseases like obesity and diabetes.
The report emphasizes that new health taxation should provide dual benefits: reducing the consumption of unhealthy foods while generating revenue to enhance public health spending under the Healthy Pakistan initiative. Specific recommendations include increasing the FED on sugary fruit juices and flavored waters (excluding mineral waters) from 20% to 40%, and targeting aerated drinks with added sugars.
The Ministry also advises maintaining records of tax revenue to ensure proportional increases in health expenditure based on revenue growth. This proposed policy aligns with a global trend in health taxation, similar to policies in Colombia and Saudi Arabia, focusing not just on revenue but on fostering healthier dietary habits and alleviating the long-term impact of diet-related illnesses in Pakistan.
