Chips, Noodles, Ice Cream to Get Pricier in Budget 2025-26

In the upcoming federal budget for 2024–25, the government is expected to introduce additional taxes that could put further financial pressure on consumers. Among the key proposals under consideration is the imposition of a 5% federal excise duty (FED) on over 50 types of ultra-processed foods, aiming to boost indirect tax revenue.

The proposed levy would affect a wide array of everyday food items, including frozen foods, chips, carbonated drinks, instant noodles, ice cream, biscuits, ready-made meals, sausages, and sauces. If approved, this move could become one of the most notable tax changes in the new fiscal plan. However, a final decision is yet to be made.

At the same time, the packaged juice industry is lobbying for relief in the upcoming budget. Industry representatives are urging the government to cut the current 20% FED by at least five percentage points, citing that the heavy tax load, when combined with the 18% general sales tax (GST), is severely stunting growth.

According to industry sources, since the FED was first introduced in 2023, the juice sector has experienced a 45% drop in sales volume, with revenue falling sharply from Rs72 billion to Rs42 billion.

This downturn has pushed many consumers toward cheaper, unregulated alternatives, which in turn has reduced overall tax collection and weakened the sector’s sustainability.