Govt Likely to Impose FED on 50+ Ultra-Processed Food Items in FY26 Budget

The federal government is considering imposing a 5 percent Federal Excise Duty (FED) to generate Rs. 250 billion from more than 50 types of ultra-processed food products to boost indirect tax revenue, sources in the Federal Board of Revenue (FBR) told ProPakistani. Items likely to fall under this proposed duty include frozen foods, chips, carbonated drinks, instant noodles, biscuits, ice cream, frozen meat, sauces, prepared meals, sausages, and various other processed food items. According to officials, the measure is aimed at significantly enhancing revenue in the upcoming fiscal year. If approved, this would be the largest indirect tax initiative in terms of revenue generation and is part of the government’s broader strategy to expand the excise duty base. The proposal is currently under review and is expected to be included in the upcoming budget discussions.