Proposed Health Tax on Bakery and Confectionery Items in Pakistan’s 2025-26 Federal Budget
In a significant move aimed at improving public health, the Ministry of Health has proposed a 20% health tax on a variety of bakery and confectionery products for the federal budget 2025-26. This tax is part of a broader effort to reduce the consumption of unhealthy, processed foods that contribute to rising health issues like obesity and diabetes.
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Key Proposals:
- 20% Health Tax: The proposal includes a tax on a range of ready-made and highly processed food items such as cakes, biscuits, pastries, and other bakery and confectionery products.
- Increase in Federal Excise Duty: Alongside the health tax, the Ministry recommends increasing the federal excise duty on certain products from 20% to 40%. This increase aims to generate additional revenue for the government while also discouraging the consumption of harmful foods.
- Gradual Tax Increase: In a long-term strategy, the Ministry has suggested gradually increasing the health tax to 50% by 2028-29. This phased approach is designed to discourage the consumption of high-calorie foods and reduce the public’s reliance on products that negatively impact overall health.
Health and Economic Goals
The initiative targets reducing the growing rates of obesity, diabetes, and other lifestyle-related health issues that have become increasingly prevalent in the country. By imposing these taxes, the Ministry hopes to encourage healthier eating habits, promote the consumption of more nutritious foods, and generate government revenue that can be reinvested into public health initiatives.
If approved, this measure will mark a significant step toward reshaping dietary habits in Pakistan and addressing the public health challenges posed by processed and sugary foods.
