ISLAMABAD: The government is considering reducing the General Sales Tax (GST) on dairy products from 18% to 10% following directives from Federal Minister for Commerce Jam Kamal Khan, in a move aimed at providing relief to consumers and boosting Pakistan’s dairy industry.
The proposal was discussed during a meeting between the Ministry of Commerce and a delegation of the Pakistan Dairy Association, led by CEO Dr Shehzad Amin. Rana Ihsaan Afzal also participated virtually, along with senior government officials.
During the meeting, stakeholders highlighted key challenges facing the dairy sector, including high taxation, low productivity, and lack of formalisation. The association noted that Pakistan’s 18% GST on dairy products is significantly higher than global and regional standards, where such products are often taxed at minimal or zero rates.
In response, Jam Kamal directed the association to submit detailed proposals for reducing GST to 10%, while assigning Rana Ihsaan Afzal to coordinate with stakeholders to develop a comprehensive plan.
The discussions also focused on improving genetic quality of dairy breeds, promoting farmer training, and transitioning the sector towards formal business practices. The minister stressed that structured support, better regulation, and farmer education are essential to increase milk yields and strengthen the industry.
Additionally, the dairy body proposed financial support mechanisms, improved access to banking facilities for farmers, and regulatory measures to ensure the sale of pasteurised and properly packaged milk. Pilot projects in major cities were also suggested to facilitate sector formalisation.
The commerce minister assured full support, stating that he would engage provincial governments to ensure coordinated efforts for implementing reforms and enhancing the overall contribution of the dairy sector to Pakistan’s economy.
