Ministry warns FBR: Poultry/dairy products at risk of global exclusion

ISLAMABAD: The Ministry of National Food Security has warned the Federal Board of Revenue (FBR) that the heavy taxation including sales tax on the import of chicken and ingredients of poultry/ animal feed would exclude Pakistani products from the international markets.

In this connection, the Ministry of National Food Security has approached the Finance Ministry and the FBR for providing relief from taxes for the poultry/ dairy sector.

According to the ministry, the government has imposed taxes on the import and export of animals and animal-related products such as semen, embryos, compound animal feed, ingredients of poultry/cattle feed, soybean, meals/ seed, oil cake of cotton seed, poultry/ cattle feed premix, by-pass fat, calf milk replacer, mineral, machinery and its spare parts used in the animal industry, branded and packed poultry meat and value-added products.

The imposition of 17 percent sales tax plus three percent regulatory duty and around 7-8 percent of the value has significantly increased the cost of production and made local produce highly un-competitive in the international markets. If this practice continued, Pakistani produce would be at risk of exclusion from international markets such as the Middle East and Gulf countries.

Govt plans to rationalise duties, taxes on food items

Moreover, the destruction of infrastructure and significant mortality of animals and poultry due to the ongoing floods and torrential monsoon rains will also negatively impact the supply chain of animal and animal products resulting in food scarcity and food insecurity besides further escalating the prices of animal-related commodities in the country.

Keeping in view the said explanation, it is strongly recommended that the rate of taxes and duties on products of animal-origin may be reviewed, exempted and or reduced back to the position executed before the imposition of the current tax regime and to the extent given: Sales tax on import of Grand Parent Chicks (GPs) has been proposed to be reduced from 17 to zero percent.

The reduction in the cost of poultry production will lead to low market prices of poultry meat and eggs for consumers.

The 17 percent sales tax on the ingredients of poultry/ animal feed has been proposed to be withdrawn.

Copyright Business Recorder, 2022