Beverage industry proposes reduction in taxes from 20pc to 15pc ahead of FY2026-27 budget

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ISLAMABAD : The beverage industry has proposed reducing the Federal Excise Duty (FED) on aerated waters from 20 per cent to 15pc.

It assured that the legitimate beverage industry would generate an additional Rs8 billion in gross tax revenues in the first year and projected cumulative gross tax collections of around Rs63 billion over a three-year period.

In a letter to the Federal Board of Revenue (FBR) and the finance ministry, the Beverages Advisory Foundation (BAF) said that a lower FED rate would expand the tax base and generate higher cumulative tax collections, whereas higher taxes on the beverage industry have led to an increase in the share of the undocumented sector.

The BAF suggested that the government should reduce the FED, and if the projected results are not met by June 2027, the FED could be reverted back.