Senate’s finance & revenue committee rejects proposal, as measures are counterproductive to govt’s revenue targets, doomed to backtrack sector growth.

Industry coalition of juice manufacturers have demanded Prime Minister Muhammad Shehbaz Sharif, and Finance Minister Mohammad Ishaq Dar to withdraw the 10% Federal Excise Duty on juice industry.
The FED imposition will pose to threaten the sector’s growth that has already seen a slump the preceding few years.

Meanwhile, the proposal was countered by the Senate’s Standing Committee on Finance and Revenue that FED on fruit juices should be halved to 5 percent.
The fruit growing value chain of Pakistan is improving due to the central role of the fruit juices industry. The industry’s collaboration with the farming community prevents overripe fruit from being wasted. Moreover, due to poor storage facilities a lot of fruits are wasted in the peak season, the formal fruit industry sector helps assist with this problem of storage.

The industry also helps with providing better processing and more efficient ways of fruit preservation so they are not wasted if produced in bulk. The industry also facilitates the farmers’ community by working with and purchasing fruits that are especially available in surplus quantities.

Approximately, 100,000 tons of mangoes are bought by the industry from local farmers to be converted into pulp. This has brought about a positive influence on the earnings of thousands of local farmers in the country. This year though, experts have already warned of poor volumes of mango production due to multiple incontrollable factors, which may also impact the rural economy.

In line with local regulations (such as Punjab Food Authority), fruit drinks have minimum 8% fruit content, nectars have 25-50% fruit content and pure juices have 100% fruit content. In fact, fruit juices are promoted as healthier options by Food Authorities across the country for consumption in schools and colleges.

The FED increases the consumer price of fruit juices encouraging the consumers to opt for the products by the informal sector which can be of low quality and generate lower tax revenue. Indirect imposition of tax on the formal juice industry will give the undocumented businesses an opportunity to create their presence in the market by accommodating retailers and producers through more profitable margins.

Link to appeal: