The government has proposed abolishing the Federal Excise Duty (FED) on eligible sports and electrolyte drinks. The proposal appears in the salient features of the Finance Bill 2026-27.
Officials said the relief targets beverages meeting World Health Organization (WHO) standards. Moreover, the measure aims to rationalise taxes while improving access to hydration products.
The proposed tax exemption covers drinks that replenish fluids and electrolytes lost through physical activity. It also includes beverages designed for illness-related dehydration and nutritional recovery.
Tax Relief Targets WHO-Compliant Hydration Products
Authorities said manufacturers and importers could benefit from the proposed FED abolition. Consequently, consumers may see lower retail prices after the measure takes effect.
Sports and electrolyte drinks remain popular among athletes and fitness enthusiasts. Additionally, many people use these beverages to recover from dehydration caused by heat or illness.
Health experts often recommend electrolyte replenishment solutions during excessive fluid loss. Therefore, the proposal may improve access to products supporting hydration and recovery.
Budget Measure Supports Healthier Beverage Choices
Industry representatives have long requested separate tax treatment for functional health beverages. They argued such products differ significantly from conventional sugary drinks.
The government appears to recognise that distinction through the proposed tax relief. Furthermore, only beverages meeting prescribed WHO standards will qualify.
Officials said the measure also supports healthier beverage choices across Pakistan. It may prove especially beneficial during extreme heat when dehydration cases increase.
The proposal forms part of broader tax rationalisation measures under Budget 2026-27. However, the FED abolition will only take effect after Parliament approves the Finance Bill. The measure will become law following its formal enactment.
