PPA urges FBR to abolish fixed FED of Rs10 per DOC

ISLAMABAD: The Pakistan Poultry Association (PPA) has urged the Federal Board of Revenue (FBR) to abolish the fixed Federal Excise Duty (FED) of Rs10 per Day-Old Chick (DOC), terming the levy a major burden on the poultry sector.

In a letter to the tax authorities, PPA Chairman Abdul Basit said that Pakistan’s poultry breeding/hatching sector is facing an unprecedented crisis due to severe oversupply of Day-Old Chicks (DOCs).

Through the Finance Act, 2025, Federal Excise Duty (FED) was imposed on Day-Old Chicks by inserting Serial No64 in Table-I of the First Schedule to the Federal Excise Act, 2005, with a fixed duty of Rs10 per DOC.

At the time of introduction, DOC market prices were above Rs200 per chick, making the FED incidence around 5 percent of supply value. Due to excessive supply, DOC prices have fallen sharply to around Rs5 per chick, while production costs remain between Rs90-100 per DOC.

The association argues that the fixed FED of Rs10 has become anomalous, as it is now higher than the market value of the product in many cases. It requested that the FED should be linked with the value of supply instead of a fixed amount, considering the volatile nature of DOC prices.

The association highlighted that hatcheries are forced to destroy unsold chicks when there are no buyers, despite investing heavily in breeder farms, manpower, bio-security, feed and other inputs.

Several members of the association had already applied under Rule 20 of the Federal Excise Rules for permission to destroy DOCs in the presence of officials deputed by the Commissioner.

The association stated that while the legal procedure allows destruction under official supervision, it does not resolve the underlying anomaly in the existing duty structure.

The PPA requested that the fixed duty of Rs10 per DOC be withdrawn. However, if abolition was not considered feasible, it proposed replacing the fixed levy with an ad valorem duty of 5 percent of the value of supply.

The association warned that the current crisis was affecting Pakistan’s poultry sector, food security, and employment, and sought urgent consideration from policymakers.

When contacted for comment Shahid Jami Tax Consultant explained that charging of fixed FED on quantity produced instead of value of quantity produced is very unrealistic approach. He observed FBR has not hired industry expert with the result that such erroneous taxation in the era of technology driven taxation.

Copyright Business Recorder, 2026