KARACHI: The poultry traders have urged the government to restore zero-rating to poultry processing.
The Pakistan Poultry Association (PPA), in its pre-budget proposal, said that Pakistan is the 11th largest broiler producer in the world with production of 1.02 billion broilers per annum while it currently processes only four per cent of the total live broiler produced.
The promotion of processing in poultry will bring stability in prices and create exportable products. Besides, the sector will move from almost non-documented to fully documented, thereby increasing revenues.
Zero-rating should be provided only to such processing plants which are in the corporate sector and essentially have a slaughtering unit and a value-addition unit within the same premises. PPA said withdrawal of zero-rating has increased the cost of production by Rs10-40/kg of processed chicken and value-added products.
Inputs for value-added products are subject to 15-30pc import duty plus 17pc sales tax on duty paid value. Imports of value-added chicken products falling under PCT heading 1601 under FTA with Malaysia are duty free; imports from China attract 10pc and 16pc import duty under PCT Heading 1601 and 1602, respectively, and from India attract only 5pc import duty.
Since signing of FTAs, a number of fast food chains have started importing value-added chicken products from Malaysia and China.
Import of one 40ft container of 25 tonnes of boneless chicken breast meat displaces local production of 183,480 broilers, 2,042 parent breeders and 830,000kgs of poultry feed which will cause a dent in the GDP of Rs58.71m (183,480 birds x Rs320), while 36,050 man-hours of jobs will be lost.
PPA urged the government that local value-added poultry processing sector be allowed to import their inputs for producing value-added chicken products free of import duty and sales tax.
