There are moments in policymaking when the very tools meant to grow revenue end up stifling the source. The 20% Federal Excise Duty (FED) imposed on Pakistan’s formal packaged juice industry is a textbook example of such a miscalculation. Envisioned as a way to plug fiscal deficits, this additional levy—imposed on top of 18% GST—has not only throttled industry growth but also shrunk government revenues, devastated rural livelihoods, and handed a lifeline to the undocumented economy.

If ever a case needed re-examination ahead of Pakistan’s upcoming budget cycle, this is it.

Before the imposition of the 20% FED in Budget 2023–24, the formal juice industry was on a growth trajectory; projected to surpass PKR 72 billion in sales. But with the tax hike in place, those projections evaporated in thin air. Industry sales plunged by a staggering 45%, falling to approximately PKR 42 billion. The installed production capacity now sits idle. Factories are scaling back. And fresh investments—so critical for industrial vitality—have all but halted.

The most telling irony? The government’s revenue projections from this sector fell short. What was expected to be a net gain in tax receipts has instead become a net loss, as the higher tax rate triggered a dramatic contraction in taxable sales.

The damage isn’t confined to boardrooms or spreadsheets. It’s trickled down to Pakistan’s orchards, silos, and farms. A thriving juice industry means robust demand for mangoes, kinnows, peaches, and guavas—much of it procured directly from domestic farmers. In its prime, the formal juice industry purchased over 100,000 tonnes of fruit per annum.

Now,........

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