18pc sales tax on packaged milk: Senate proposal offers lifeline

KARACHI: The National Budget 2024-25 originally proposed an 18% sales tax on packaged milk, a measure intended to boost government revenue but with potential widespread impacts on public health, agriculture, and economic stability. However, responding to concerns raised, the Senate of Pakistan has intervened with a recommendation to maintain the zero rating for packaged milk and dairy products.

This recommendation, detailed in Annexure C of the Senate’s report on the budget, aims to support the dairy sector in delivering safe and affordable milk to consumers by withdrawing the proposed sales tax amendment from the finance bill 2024-25.

Public Health Concerns: Milk is a cornerstone of the human diet, renowned for its nutritional benefits. Dairy products are nutrient-rich and are excellent sources of high-quality protein, as well as calcium, phosphorous, potassium, iodine, vitamin B2 and B12.

The unique combination of constituents of milk and other dairy products contributes to the health effect known as “dairy matrix” and to the prevention of many diet related diseases such as metabolic disorders, osteoporosis, diabetes, hypertension and cardiovascular concerns, all supported by rigorous scientific research across the globe.

Countries with higher milk consumption typically enjoy lower rates of malnutrition and chronic illnesses. However, Pakistan faces significant challenges due to the prevalence of loose milk, contributing to high levels of both malnutrition and chronic diseases.

For instance, diabetes prevalence in Pakistan exceeds 30%, well above global averages. Additionally, the country grapples with alarming malnutrition rates: 40% of children suffer from stunting, 18% from wasting, and 29% are underweight.

Despite being among the world’s top milk consumers, Pakistan struggles with severe deficiencies in essential nutrients. These stark statistics highlight the urgent necessity for Pakistan to shift towards packaged milk to improve public health outcomes and effectively tackle these pressing health issues.

A significant portion of Pakistan’s milk supply flows through informal channels, commonly referred to as loose milk, which poses grave health risks due to widespread adulteration and contamination. Studies conducted by prominent academic institutions and the Pakistan Food Authority (PFA) consistently highlight that a considerable amount of loose milk is unfit for human consumption.

Copyright Business Recorder, 2024