Beverage industry: Proposal to cut FED on aerated beverages to 15pc endorsed

ISLAMABAD: Chairman of the Senate Standing Committee on Finance Saleem Mandviwalla has endorsed a proposal of beverage industry to reduce the Federal Excise Duty (FED) on aerated beverages from 20 percent to 15 percent to generate an additional revenue of around Rs 10 billion during 2026-27.

During the review of the Finance Bill 2026, the industry guaranteed a major increase in volumes of beverages with a raise in revenue by Rs8-10 billion in 2026-27 following reduction in excise duty.

At the committee, a major debate has surfaced regarding the taxation policy for the manufacturing sector. From the platform of the Beverages Advisory Foundation (BAF), Dr. Faisal Hashmi, Chairman Beverages Advisory Foundation, presented a comprehensive proposal during the post-budget session of the Senate Finance Committee on June 16, urging the government to reduce the Federal Excise Duty (FED) on aerated beverages from 20 percent down to 15 percent.

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The reduction in the FED would increase volumes and turnover of the industry in 2026-27.

Chairman of the Senate Standing Committee on Finance, Revenue, and Economic Affairs, endorsed the proposal, noting that this marks a unique precedent where an industry is providing concrete assurances of generating sizeable revenue for the national exchequer. He emphasized that such a proactive and revenue-positive offer from the corporate sector warrants serious consideration and detailed deliberation by the government.

The documented beverage sector proposed that the requested fiscal adjustment would not cause a deficit.

Copyright Business Recorder, 2026