ISLAMABAD: The federal government has decided to impose 10 per cent sales tax on packaged milk and also withdraw zero rating facility for dairy products in the federal budget 2015-16, being announced on today.
According to finance bill 2015-16 being presented in National Assembly today, the government will impose 10 per cent duty on packed milk, which will indirectly affect the demand of lose milk, leading to hike in its price by at least Rs5 per litre, while the price of packaged milk will go up by Rs10 per litre.
The representatives of the dairy industry have termed the 10% sales tax negative for the sector and said that the new tax policy regime will increase costs for the milk and dairy processing industry and increase net price of packaged milk.
Dairy Association (PDA) Chairman Faisal Malik said that Pakistan is the world’s fourth largest milk producer, with an annual output of approximately 41 billion litres. Milk is an essential food for human beings; it provides calcium, key vitamins and iron for the human body. It is the first food that a child nourishes on. Milk and dairy products account for 22% of kitchen expenditure (compared to wheat, which is 12%).
Milk products also have 7.4% weightage in the Consumer Price Index, while wheat is 4.2%. Overall, the dairy sector constitutes 11% to Pakistan’s GDP.
