Islamabad, May 23, 2025 – A bitter twist awaits the sweet-toothed across Pakistan as the government prepares to slap a higher Federal Excise Duty (FED) on beloved treats like chocolates and cookies in the upcoming Budget 2025-26.
Yes, your favorite late-night indulgence and teatime snacks could soon burn a deeper hole in your pocket.
In a dramatic move aimed at boosting revenue, Pakistan is reportedly finalizing plans to impose steep FED hikes on a broad range of packaged consumer goods—primarily focusing on confectionery items such as chocolates, cookies, cakes, sauces, and snacks. Sources close to the budget deliberations suggest the new measures could rake in a staggering Rs 150 billion in taxes, hitting some of the most consumed products in the country.
The cookie and chocolate industry, which has witnessed explosive growth in recent years, is now bracing for a tax storm. Industry estimates show that the biscuit and cookie sector, valued at a colossal Rs 206 billion, could be forced to cough up Rs 48.6 billion in taxes, with Rs 41.1 billion coming from FED alone. The chocolate and sweets market in Pakistan, especially strong in Punjab with a Rs 201 billion share, is expected to generate Rs 47.4 billion in taxes, including a hefty Rs 40.2 billion from FED.
This fiscal strategy, while being hailed as a ‘smart’ taxation approach by policymakers, could cause uproar among consumers. The plan targets non-essential and processed foods—luxuries for some, daily delights for others. It’s a calculated gamble: increase taxes on widely enjoyed items like cookies and chocolates, but avoid direct pressure on staples for lower-income households.
Finance Ministry insiders argue that by targeting these discretionary consumption sectors, Pakistan can address its fiscal deficit without strangling essential goods markets. Moreover, shifting the tax burden to high-consumption but previously under-taxed categories offers a path toward broader economic stability and equity.
Still, critics warn that the price surge in cookies, chocolates, and similar items may hit middle-class consumers hardest and dampen retail momentum. For now, as Pakistan inches closer to finalizing its Budget 2025-26, one thing is certain—your favorite chocolate bar and cookie pack are about to get a lot more expensive.