Under the proposed changes, excise duty on soft drinks, sweetened beverages, juices, carbonated soda water, flavoured or non-sugar sweets may be increased from 20% to 40%.
Items likely to be affected include carbonated beverages made from juice or pulp, syrups, and squashes. A new 20% tax has also been proposed on industrial dairy products.
Meat products such as sausages, dried, salted or smoked meats are also expected to become more expensive. Additionally, the tax rate on bakery and confectionery items—such as chewing gum, candy, chocolate, caramels, pastries, biscuits, corn flakes, and cereals—is expected to rise by 50%.
Frozen desserts, flavoured yoghurts, ice creams, and all food items made from animal or vegetable fat may also see a tax hike.
The government plans a phased increase in these taxes over the next three years, with the total hike reaching 50%, the sources said.
Meanwhile, the defence budget for the upcoming fiscal year is expected to rise by PKR 159 billion to a total of PKR 2,281 billion.
This reflects a 7.49% increase from the current fiscal year (2024–25), which had an allocation of PKR 2,122 billion. In comparison, the defence budget for 2023–24 stood at PKR 1,858.8 billion—meaning this year’s allocation marked a 14.16% increase.
Over the past year, the defence budget has risen by PKR 263.2 billion, underscoring the government’s ongoing commitment to national security amidst fiscal reforms.