Juice industry urges cut in FED to boost revenue
Listen to article
The Fruit Juice Council (FJC), representing the formal juice industry, has urged the government to reduce the 20% Federal Excise Duty (FED) on juices to 15% to generate higher revenue than the outgoing financial year.
The current 20% FED, in addition to 18% GST, has stalled industry growth. In FY2024-25, government revenue projections fell short, suggesting the industry has hit the Laffer Curve — where high taxation leads to lower sales and declining revenue. Under local rules, fruit drinks must have at least 5% fruit content, nectars 25-50%, and pure juices 100%. These juices are healthier due to their fruit content. Punjab and Sindh Food Authorities permit the sale of fruit-based juices in schools while restricting other beverages.
Due to falling sales, fruit procurement dropped below 2017 levels. Only 20,233 tonnes of mangoes were purchased last year compared to 31,000 tonnes in 2017-18, hurting farmers and pulpers.
While the government claims it supports a documented economy, such policies contradict that goal. The 20% FED and 18% GST are driving consumers toward low-priced, low-quality, and potentially unsafe options from the undocumented sector, which continues to grow.
The budget also proposes capping the chilling charge adjustment at 5% instead of 10%, further burdening manufacturers.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
a day ago
- Business Recorder
Wall Street edges up with Trump's Middle East decision in focus
Wall Street's main indexes nudged higher on Friday, tracking strength in global stocks after President Donald Trump held off from making an immediate decision on U.S. involvement in the Israel-Iran war. Trump will take a call in the next two weeks, the White House said on Thursday, as hostilities between the two Middle Eastern countries approached their second week. Markets have been on edge as Trump has kept the world guessing on his plans - veering from proposing a swift diplomatic solution to suggesting the U.S. might join the fight as Israel aims to suppress Tehran's ability to build nuclear weapons. A senior Iranian official told Reuters Tehran was ready to discuss limitations on its uranium enrichment, but zero enrichment will be rejected 'especially now under Israel's strikes'. Foreign Minister Abbas Araqchi has arrived in Geneva to meet European counterparts, who are hoping to establish a path back to diplomacy. 'Any news flow that's going to lean in the direction of de-escalation is going to be a market positive and we're seeing that to a certain extent here,' said Art Hogan, chief market strategist at B. Riley Wealth. Concerns about price pressures in the U.S. were also in focus after Federal Reserve policymakers on Wednesday warned inflation could pick up pace over the summer as the economic effects of Trump's steep import tariffs kick in. They kept interest rates unchanged. Wall St indexes rise ahead of Fed's rate verdict On Friday, Fed governor Chris Waller said the central bank should consider cutting interest rates at its next meeting given recent tame inflation data and because any price shock from tariffs will be short-lived. At 10:06 a.m. ET, the Dow Jones Industrial Average rose 123.38 points, or 0.29%, to 42,295.04, the S&P 500 gained 13.34 points, or 0.22%, to 5,994.21 and the Nasdaq Composite gained 38.74 points, or 0.20%, to 19,585.01. Nine of the 11 major S&P 500 sub-sectors rose. Real estate led sector gains with a 0.7% rise. On the flip side, healthcare stocks lost 0.5%. All three main indexes are set for weekly gains. Investors are also bracing for any potential spike in volatility from Friday's 'triple witching' - the simultaneous expiration of single stock options, stock index futures, and stock index options contracts that happens once a quarter. Among megacap stocks, Apple advanced 1.3%. Kroger rose 6.4% after the grocery chain increased its annual identical sales forecast. Mondelez International gained 2.4% after brokerage Wells Fargo upgraded the Cadbury parent to 'overweight' from 'equal-weight'. Accenture fell 7.2% after the IT services provider said new bookings decreased in the third quarter. Wall Street's strong gains last month, primarily driven by a softening in Trump's trade stance and strength in corporate earnings, had pushed the benchmark S&P 500 index close to its record peaks before the ongoing conflict in the Middle East made investors risk-averse. The S&P 500 index now remains 2.4% below its record level, and the tech-heavy Nasdaq is 2.8% lower. Advancing issues outnumbered decliners by a 2.16-to-1 ratio on the NYSE and by a 1.45-to-1 ratio on the Nasdaq. The S&P 500 posted 12 new 52-week highs and 2 new lows while the Nasdaq Composite recorded 55 new highs and 31 new lows.
Business Recorder
2 days ago
- Business Recorder
Euro zone yields on track for a weekly drop, Middle East in focus
Euro zone government bond yields were on track for a weekly decline as the Israel-Iran air war entered its eighth day, with investors downplaying inflation concerns while awaiting clarity on a potential US involvement in the conflict. President Donald Trump will make a decision in the next two weeks, the White House said on Thursday, raising pressure on Tehran to come to the negotiating table. German 10-year yields, which serve as the benchmark for the wider euro zone, fell 2.5 basis points (bps) to 2.49%, and were set to end the week 4.5 bps lower. Money markets priced in a European Central Bank deposit facility rate at 1.77% in December, compared with 1.75% last week. The yield on the German two-year bonds, which are more sensitive to expectations for ECB policy rates, was down 1.5 bps at 1.83%. Euro zone bond yields steady before Fed, traders await new catalysts A drop in appetite for risk assets widened yield spreads for government bonds of highly indebted countries, such as Italy and France, against safe-haven German Bunds. Italy's 10-year yields dropped 4.5 bps to 3.50%. Italian yield gap against Bunds - a market gauge of the risk premium investors demand to hold Italian debt – tightened to 100 bps on Friday, but was set for its biggest weekly rise in a year.
Business Recorder
2 days ago
- Business Recorder
Dollar holds steady
LONDON: The dollar edged up on Thursday as the threat of a broader Middle East conflict loomed over markets, while a raft of rate decisions in Europe highlighted the difficulty central bankers have in dealing with heightened uncertainty. Rapidly rising geopolitical tensions have boosted the dollar, which has reclaimed its safe-haven status lately. Iran and Israel carried out further air attacks on Thursday, with the conflict entering its seventh day. Concerns over potential US involvement have also grown, as President Donald Trump kept the world guessing about whether the United States will join Israel's bombardment of Iranian nuclear sites. The Federal Reserve left rates steady on Wednesday. The Bank of England also left rates unchanged on Thursday, citing elevated global uncertainty and persistent inflation as concerns for the economic outlook. The pound fell initially, but later recouped most of those losses. The Swiss franc, meanwhile, was stronger against the dollar following an expected rate cut from the Swiss National Bank. But the surprise came from the Norges Bank, which delivered a 25 bps rate cut, while markets had expected the Norwegian central bank to hold rates. The dollar and the euro both rallied by 1% against the Norwegian crown . The crown is still one of the top-performing major currencies against the dollar this year, with a gain of around 11%. Meanwhile, the euro dipped 0.1% to $1.1473. The dollar rose 0.2% against the yen to 145.56. The dollar index, which measures the currency against six others, was flat at 98.9 and was set for about a 0.8% gain for the week, its strongest weekly performance since late February. ING strategist Francesco Pesole said the fact that geopolitical risks and high oil prices were not 'US-induced risks,' unlike the risks to US government finances from Trump's tax cut plans or his tariff policies, the dollar could once again take on its role as a safe haven. 'The dollar is still in a more favourable spot than the energy-dependent safe-haven alternatives (like the euro) in this environment,' he said. US markets were closed on Thursday for the federal Juneteenth holiday, which could mean liquidity is lower. In a widely expected move, the Fed held rates steady, with policymakers signalling they still expect to cut rates by half a percentage point this year, although not all of them agreed on a need for rate cuts. Fed Chair Jerome Powell said goods price inflation will pick up over the course of the summer as Trump's tariffs start to impact consumers. 'Ultimately, the cost of the tariff has to be paid, and some of it will fall on the end consumer,' Powell told a press conference on Wednesday. 'We know that because that's what businesses say. That's what the data say from the past.' The comments from Powell underscore the challenge facing policymakers as they navigate uncertainties from tariffs and geopolitical risks, leaving markets anxious about the path of US interest rates.
