Federal Minister for Commerce Jam Kamal Khan has directed authorities to prepare a proposal to reduce the general sales tax (GST) on dairy products from 18% to 10%, in a move that could provide significant tax relief and support to Pakistan’s dairy sector.
Jam Kamal chaired a meeting with a delegation of the Pakistan Dairy Association (PDA), led by CEO Dr Shehzad Amin. The meeting was also attended virtually by Rana Ihsaan Afzal, Coordinator to the Prime Minister on Commerce, along with senior officials from the Ministry of Commerce, according to an official statement on Monday.
The discussion focused on the challenges facing Pakistan’s dairy sector, particularly regarding tariff and taxation issues, as well as improving productivity, genetic quality, and the formalisation of the sector.
Kamal emphasised that enhancing the genetic quality of dairy breeds and guiding farmers toward a formalised business model is critical for the sector’s development.
He said that without proper genetic direction, farmers cannot achieve the desired milk yields and that structured support, regulation, and farmer education are essential to transform the sector.
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The association pointed out that the current GST on dairy products is 18%, while globally, and even in neighbouring countries, such products often enjoy zero or minimal taxation.
In response, Jam Kamal asked the association to submit proposals for reducing the GST from 18% to 10% and asked Rana Ihsaan Afzal to take the lead in working closely with the association to prepare a comprehensive proposal.
The minister also stated that he would write letters to the chief ministers and all relevant ministers to ensure coordination and support for implementing these proposals and improving the formalisation of the dairy sector across the country.
The association presented additional proposals, including the provision of financial support and banking facilities for farmers, the implementation of regulatory measures to ensure only pasteurised or properly packaged milk is sold, and the initiation of pilot programs in major urban centres to transition farmers into formal business practices.
They also highlighted the need for cross-breeding programs and farmer training to enhance genetic quality and improve overall milk production.
Jam Kamal welcomed these proposals and stressed that a comprehensive plan should be prepared for timely implementation, ensuring that Pakistan’s dairy sector achieves higher productivity, better regulatory compliance, and contributes more effectively to the country’s economy.
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