Punjab fruit farmers vulnerable to regressive taxation measures, may go below poverty line.
The Fruit Juice Council, in a letter to Mian Muhammad Nawaz Sharif, the President of PML-N and former Prime Minister, urged him to mediate and guide the federal government to end the 20% Federal Excise Duty (+18% GST) on packaged fruit juices in the upcoming Federal Budget 2024-25. This duty is negatively impacting the rural economy of fruit farmers in Pakistan, particularly in Punjab, as well as the value chain involving pulping units and fruit juice manufacturers. The FED also poses a threat to the potential export revenue of USD 100 million by 2028.
“We appeal to the PML-N leadership, Mian Muhammad Nawaz Sharif sahib, and Chief Minister Punjab Maryam Nawaz sahiba to recommend the removal of the 20% FED in order to safeguard Punjab’s agricultural sector,” said Aatekah Mir Khan, representative of the Fruit Juice Council.
“Fruit farmers in Punjab are struggling due to low demand causing fruit wastage, and pulping units are doomed to shut, as the industry has crashed,” she said. “With the sudden imposition of 20% FED on juices (in addition to 18% GST) in the Annual Budget 2023-24, industry volumes plunged by 41%,” she added.
FJC, which includes industry players CitroPak, Haleeb, Nestlé, PepsiCo, Popular, Shezan and TetraPak etc has been providing safe and healthy fruit-based juices to consumers. FJC members are fully compliant to federal and provincial food authorities and had an annual turnover of about PKR 60 billion in 2022, employing more than 10,000 employees.
“A myopic approach to revenue collection is akin to killing the local juice, pulping and packaging industry as well the fruit farmers associated with it. Eventually these farmers will be pushed under the poverty line, increasing the burden on the government,” she said.
“The government might have increased its revenue for this year because of the high taxation regime on juices in FY 2023-24, but this revenue will keep on falling in the coming years based on the drastic decline in volumes of the fruit juice industry,” she remarked. “On the other hand, abolishing the FED, will result in the government revenue increasing from Year 2,” she added.
The formal packaged juice industry, by procuring fruits is protecting the farmers’ livelihood by procuring mangoes, kinnows and guava mainly from local farmers in Sargodha, Multan, Rahim Yar Khan, for conversion into pulp, whereas peaches and apples are procured from Skardu and Hunza, GB and Swat, KP.
Previously fruit farmers and the packaged juice industry also appealed to the Prime Minister Muhammad Shehbaz Sharif and Finance Minister Muhammad Aurangzeb
