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KARACHI: Pakistani packaged milk consumers will pay an additional Rs50 per litre starting July 1, 2024 due to the implementation of an 18 percent General Sales Tax (GST) in budget.

The proposed 18 percent sales tax on packaged milk in the new budget could prove to be disastrous and, if not withdrawn, may shrink the size of the formal dairy sector by more than 70 percent, industry sources said.

Also, the imposition of an indirect sales tax instead of a direct income tax is expected to inflict a loss of at least Rs23 billion on farmers who are still reeling from the government’s ill-planned wheat imports during the caretaker setup, they added.

GST on infant food, milk in phases

The industry will not be able to buy milk from the farmers as this tax will erode their profits, they said.

The manufacturers and other stakeholders that are linked to the country’s small but documented packaged milk industry are concerned over the government’s plan to levy an 18 percent sales tax on packaged milk from next financial year which will start from July 01.

The formal dairy sector helps farmers improve their living standards through guaranteeing the timely purchase of their milk produces, they said.

Despite being one of the world’s largest milk producers and consumers, Pakistan is a country where 40 percent children are suffering from issues like abnormal height, 29 percent are underweight while 18 percent are scrawny because of malnutrition.

About 90 percent of more than 240 million Pakistanis consume fresh unprotected milk while only 10 percent use packaged milk.

This number will further go down, which will be a huge blow for the government’s efforts to document the economy,“ they said.

“The dairy industry is a staunch supporter of taxation for the country’s development, but there must be a level playing field for the stakeholders to compete, they said.

They demanded of the government to withdraw the proposed 18 percent sales tax on packaged milk and devise policies that could incentivise and help the whole supply chain of dairy industry ensure that the consumers have easy access to pure and healthy milk products.

Copyright Business Recorder, 2024

Comments

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Power Jun 22, 2024 07:18am
It's fascist criminal government
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dr.fahad Jun 22, 2024 09:54am
DOnt breed like rabbits .
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Azam khan Jun 22, 2024 03:52pm
Packed milk companies already rais their product prices time to time without any consent like Milk pack, olpers etc.. Since petrol prices and US$ rate have been dropped around 20-25 percent
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Usman Jun 22, 2024 05:22pm
Its useless milk full of chemicals avoid it at all cost.
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SHAHID NAWAZ Jun 22, 2024 06:57pm
Natural dairy milk is healthy one. Whereas packaged milk is an artificial tea whitener. It's not a real milk.
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AK Jun 22, 2024 07:39pm
@Farmers, good opportunity to raise prices from your end as well. Its a time to recover the wheat loss. @below comments, This is an elected government, they are doing what should be done earlier.
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dr. fahad ke papa Jun 22, 2024 07:57pm
@dr.fahad, you are a moron
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saif Jun 22, 2024 09:20pm
jub banker finance minister lagy ga to awam ko yha cheezain daikhni parain gi..mulk chlna economist ka kam ha na ky banker ka
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Aam Aadmi Jun 22, 2024 09:24pm
We deserve this badly. If we cannot act or raise our united voice against such Draconian laws, and show complacency considering that others would protest on our behalf, this has to happen.
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Syed Jun 22, 2024 11:38pm
Such companies should consider absorbing this increase as they are making huge profits while common man / consumers suffering badly due to inflation, taxes etc
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imdad kolori Jun 22, 2024 11:38pm
K*te k bache
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mirza shahzad Jun 23, 2024 12:33am
@dr.fahad, if they did,nt breed like rabbits you may not have conceived as well.good riddance.
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