Coca-Cola and Pepsi get major tax relief

ISLAMABAD: The Pakistani government has reportedly resolved the long-running tax dispute between the Federal Board of Revenue (FBR) and beverage giants Coca-Cola and Pepsi, providing significant relief to the companies, according to sources.

As part of amendments to the Finance Bill 2026, the government has abolished the 20% Federal Excise Duty (FED) on low-sugar sports drinks, including Gatorade and Revive.

Sources said the exemption applies to hydration drinks containing less than 5 grams of sugar per 100 milliliters, effectively removing the excise duty on this category of beverages.

According to sources, the U.S. Embassy had also urged the Pakistani government to address tax and customs issues faced by beverage manufacturers operating in the country.