The Pakistan Vanaspati Manufacturers Association (PVMA) on Monday said that government policy of taxing ghee/cooking oil unwisely would result in closure of majority of units within six months.
Its Chairman, Amjad Rashid, along with Ikram Shaikh and Abdul Waheed, told a press conference after its central committee meeting that the 'proportionate formula' had increased tax on one kg/litre ghee/cooking oil from Rs 16.50 in June 2006 to Rs 23 in October this year and it hurt the consumers whose buying power is at the lowest level now.
He said that PVMA had attempted many times to make the government feel that it should not add to the consumers' burden by taxing ghee and cooking oil under the 'proportionate formula', but it received negative response.
Rashid said that PVMA would take up the case with President General Pervez Musharraf when he would invite him with other chairmen of associations of essential items in next few days. He said that palm olein price had shot up by $450 to over $900 in one year to take ghee and cooking oil prices to the highest ever level. He said that the ultimate effect of high taxes came on the industry in the form of less consumption, but high cost of doing business. He demanded that the government should review the policy of collecting all-time high revenue from ghee and cooking oil and cap sakes tax at $450 landed cost of palm olein.
Ikram claimed that increased import of palm olein had minimised the chance of direct filling of RBD that poses a risk to human lives. However, he noted that a vast majority of Karachi-based mills still fill RBD directly, and they do not take into account its adverse effects on the consumers' life.
Abdul Waheed noted that reduction, or at least capping of taxes, on ghee/cooking oil was inevitable to protect the consumers from additional financial burden and protect the industry from imminent closure.
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