A proposal has been put forward to impose a 20% health tax on bakery and confectionery items in the upcoming budget.
The Ministry of Health has suggested to the government that in the 2025–26 budget, hundreds of processed and ultra-processed foods and beverages — commonly referred to as bakery and confectionery items — should be subjected to a 20% health tax.
For certain items that are already under a 20% Federal Excise Duty, it has been proposed to increase the rate to 40% in the upcoming budget.
It has also been recommended that to discourage the consumption of unhealthy products, the tax rate should gradually be increased to 50% by the fiscal year 2028–29.
A report titled “Taxation Policy on Sustainable Ultra-Processed Foods and Beverages for Public Health” has been prepared and shared with the Ministry of Health. This report is currently under discussion with the Ministry of Finance and FBR as part of the 2025–26 budget planning.
