In a move to bolster revenue, the federal government is set to impose significant tax increases on food and beverage items in the 2025–26 budget, sources revealed. The proposed changes target a wide range of products, from soft drinks to bakery goods, potentially impacting household budgets across the nation.
Excise duties on sweetened beverages like soft drinks, juices, soda, syrups, and squashes will double from 20% to 40%, potentially impacting prices and consumption patterns significantly.A new 20% tax will also apply to industrial dairy products, such as flavored yogurts and frozen desserts. Bakery and confectionery items—think biscuits, chocolates, pastries, and cereals—face a hefty 50% tax hike, as do meat products like sausages and smoked meats. Ice creams and foods made with animal or vegetable fats are not spared, with a phased 50% tax increase planned over three years.
These measures aim to address fiscal challenges but may raise concerns about rising costs for everyday essentials. Critics argue the hikes could disproportionately affect lower-income households, while supporters claim the revenue is vital for economic stability.
Defence budget to rise by Rs159 billion to Rs2,281 billion, a 7.49% increase from Rs2,122 billion, enhancing national security. This follows a 14.16% rise from the 2023–24 allocation of Rs1,858.8 billion, reflecting a Rs263.2 billion increase over the past year. The government emphasizes that the enhanced defence spending is critical for national security amid evolving global challenges.
As the budget nears, debates over balancing revenue needs with affordability are intensifying. The proposed tax hikes, paired with increased defence allocations, signal a complex fiscal strategy that could reshape consumer prices and national priorities in the coming years.
