LAHORE: Patron-in-Chief Pakistan Poultry Association Khalil Sattar has called for treating the poultry production at par with milk production, which is zero rated, so as to reduce/eliminate malnutrition, under-nourishment, stunting and wasting in children in line with the Prime Minister’s vision.
The World Food Programme estimates that approximately 43 percent of Pakistan’s population is food insecure and the main reason for malnutrition is an acute shortage of protein consumption.
“In order to fill in the protein gap and to provide additional poultry products there is a definite need to expand the poultry sector, said Khalil and the proposed mini-budget totally makes it impossible.
The steps taken to increase revenue collection will result in negative growth of a steadily growing poultry industry, showing an annual growth rate of 8-10 percent, resulting in less revenue generation from the industry.
Prior to the proposed Mini Budget, a Grandparent day old chick costs US$54 C&F, attracted 3% custom duty and 2% additional custom duty, a tax impact of Rs486. “In the proposed budget, 17% sales tax would cost additional Rs1,735 and the total tax impact of sales tax and custom duties would be Rs2,221 per grandparent chick. “Without grandparents, no poultry production can take place. The increase in levy will definitely increase the cost of Day Old Parent Stock chicks as well,” reasoned Khalil.
Similarly, the poultry feed currently costs Rs86,200 per ton and 60 percent of the input cost is of sales tax and import duties on micro and macro raw materials, which amounts to approximately Rs8000/ton, which varies on different lines of feed and formulations.
In the proposed budget, sales tax has been increased from zero and 10% to 17% on some of the aforesaid raw materials, which would further increase the input tax on feed cost by approximately Rs900/ton. “In the proposed budget, the sales tax exemption on vaccines has also been withdrawn. Average cost of medicines and vaccines in Grandparent and Parent Stock production is approximately Rs475 and 17 percent sales tax would increase the cost of vaccines & medicines by Rs80-90. This would also add to inflation,” said Khalil.
Levying a 17 percent sales tax on incubators would deter the expansion plans of the poultry industry as taxing inputs of poultry feed, vaccines and poultry machinery is no different than levying a sales tax on all forms of poultry farming i.e. Grandparent, Parent Stock, Broiler Farming and final poultry product, which results in inflation in poultry product prices.
“It is proposed in the budget that processed chicken meat, packed and branded be subject to 17 percent sales tax. This would only further benefit the unorganized sector at the cost of the organized and documented sector. Processed milk sector has been zero rated enabling it to compete with the undocumented, unbranded and unpacked milk in the larger interest of consumers. This principle should be applied on processed poultry as well,” said Khalil.
Also, he added, the process industry bears heavy labour costs including contribution to social security, EOBI Workers Profit Participation Fund, payment to apprentices and handicaps etc. The cost to the unorganized live bird and street side slaughter wet market is negligible. The unorganized sector pays no taxes at all whereas the organized sector pays all kinds of taxes and produces safe and healthy products.
Copyright Business Recorder, 2022