Government urged to reconsider fruit juice tax for industry support

In June 2023, the government introduced a 20% Federal Excise Duty (FED) on fruit juice beverages to boost tax revenue. However, this decision has had unintended consequences on the juice industry and the economy.

The imposition of FED has led to a sharp decline in the packaged juice industry, resulting in job losses and reduced investments. This downturn has also affected rural communities as fruit growers and farmers face challenges due to decreased fruit procurement and income loss.

Moreover, the tax has inadvertently fueled the growth of the informal fruit juice sector, which operates without proper regulations and poses health risks. To tackle this issue, collaboration between food authorities and law enforcement agencies is essential to curb illicit manufacturers and promote healthier options.

It is imperative for the government to reassess the FED on packaged juices to support the formal juice industry and rural communities. Rather than overburdening existing taxpayers, the focus should shift towards integrating informal players into the tax system to foster industry growth.

Implementing a progressive taxation policy that incentivizes companies offering healthier products like fruit juices can benefit both the economy and public health. By regulating the informal sector and encouraging the consumption of nutritious beverages, the government can strike a balance between revenue generation and promoting well-being.