By Sana ullah Ghumman
TWA
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Recent media reports highlight the Federal Board of Revenue’s (FBR) ongoing struggle to meet tax collection targets, with consistent shortfalls in the past few months. As part of contingency measures
agreed upon with the International Monetary Fund (IMF), the government plans to implement several initiatives to bolster collections that includes raising the federal excise duty (FED) on aerated and sugary drinks.
The situation presents a unique opportunity for the government to transform the challenge into an advantage. Beyond fulfilling fiscal obligations, the option to increase FED on sugary drinks and aerated beverages, promises a “triple win” to the government. On the one hand, the decision would help government in generating crucial revenue, while on the other hand, it would discourage consumption of unhealthy food products, and alleviating the rapidly increasing disease-burden, particularly of the ‘Non-communicable Diseases (NCDs) on the healthcare system.
According to the World Health Organization (WHO), 60% of deaths in Pakistan are now because of NCDs.
Diabetes in Pakistan has reached epidemic levels, with the International Diabetes Federation (IDF) reporting 33 million Pakistanis living with the disease in 2023, making Pakistan the third-highest country
globally in diabetes prevalence. Obesity, another driver of NCDs, affects 40% of the population. Health experts believe that high consumption of sugary drinks is directly responsible for this health crisis, and these alarming trends necessitate bold policy measures.Currently, sugary drinks remain cheap and widely accessible, despite being one of the leading contributors to excess sugar consumption.
The economic implications of diet-related diseases are staggering. According to a study by the World Bank, diabetes-related annual healthcare costs in Pakistan reached USD 2.6 billion, a figure projected to rise if immediate action is not taken. By reducing sugary drink consumption, the government can reduce healthcare spending on preventable diseases, improving both economic and public health outcomes.
Sanaullah Ghumman, General Secretary of the Pakistan National Heart Association (PANAH), has been vocal in advocating for higher taxes on sugary drinks. “Pakistan’s escalating diabetes and obesity crisis is
directly linked to the overconsumption of sugary beverages. The government must prioritize public health by increasing taxes on these products and using the revenue to strengthen the healthcare
system,” he stated. Globally, countries implementing taxes on sugary drinks have seen remarkable success in curbing the
diabetes crisis. Mexico, for example, introduced a sugary drinks tax in 2014 and observed a significant decrease in consumption within two years.
Munawar Hussain, Country Coordinator for the Global Health Advocacy Incubator (GHAI), echoed similar sentiments. “Evidence from many countries shows that higher taxes on sugary drinks reduce consumption, improve health outcomes, and generate significant revenue for governments. In Pakistan, this policy could help ease the healthcare burden and
fund preventive programs to combat non-communicable diseases.”
Pakistan’s healthcare system is already overwhelmed, with limited resources to address the growing burden of NCDs. Treating diabetes, cardiovascular diseases, and obesity-related complications requires
significant investments, which are currently lacking. A dedicated portion of the tax on sugary drinks could create a sustainable funding stream to invest in hospitals, clinics, and preventive health initiatives.
As Pakistan faces a twin crisis of economic instability and a rising disease burden, increasing taxes on sugary drinks is a pragmatic and necessary step. The evidence is clear: such taxes work. They reduce consumption, save lives, and bolster government revenues. Now is the time for decisive action
The government must move swiftly to implement higher taxes on sugary beverages, ensuring that revenue is reinvested in health sector improvements. The IMF agreement for increasing the sugary drinks tax should be viewed as an opportunity to align fiscal policy with public health priorities. Pakistan cannot afford to delay; the health of its people and the stability of its economy depend on it.
