Islamabad, May 12, 2025: The upcoming federal budget is likely to bring a major change in the Federal Excise Duty (FED) regime, with sources revealing that the duty on energy drinks may be doubled from 20% to 40%.
The Federal Board of Revenue (FBR) is weighing several proposals aimed at boosting tax collection, with little chance of relief under FED except for immovable property.
In the last fiscal year alone, the FBR raised Rs. 289 billion through new FED measures.
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These included higher duties on international air travel and a Rs. 15 per kg FED on supply of white crystalline sugar to manufacturing and packaging units.
FED on cement was also increased, with excise duty rising from Rs. 3 to Rs. 4 per kg.
Under the Finance Act 2024, further duties were introduced: Rs. 44,000 per kg on acetate tow, Rs. 1,200 per kg on nicotine pouches, and a 5% ad valorem FED on lubricating oils.
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Currently, discussions are underway to revise FED rates on juices and aerated water.
Though no decisions have been finalized, the FBR is also reconsidering the current structure for cigarette taxation, with no immediate plans to reintroduce a third pricing tier.
Previously in 2023, FED on aerated water was increased from 13% to 20%, and a 10% FED was imposed on sugary juices, syrups, and squashes.
