Milk prices in Pakistan surged by more than a fifth after a new tax was applied in the federal budget, making the dairy staple more expensive than in France, Australia and some other developed nations, stated Bloomberg in a report on Thursday.
Ultra-high temperature, or UHT, milk now costs Rs370 ($1.33) a liter in supermarkets in Karachi. That compares with $1.29 in Amsterdam, $1.23 in Paris, and $1.08 in Melbourne, according to data collected by Bloomberg.
An 18% tax was applied to packaged milk as part of taxation changes approved in the national budget last week.
Previously, it was tax-exempt.
“Before the impost, which resulted in retail prices increasing by as much as 25%, milk costs were comparable with developing countries such as Vietnam and Nigeria, said Muhammad Nasir, a spokesman for the local unit of Dutch dairy producer Royal FrieslandCampina NV,” Bloomberg stated in the report.
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Costlier milk along with other taxation have raised concerns in the country that has reeled under record inflation in the past few months. While the pace of inflation has only slowed recently – largely due to a high base effect – experts say the recent budget will again stoke a fresh wave of higher prices.
Many also criticised the higher taxation on commodities like milk, arguing that it will worsen child health.
“It will deny nutrition from a population that is already suffering from malnutrition,” Nasir was quoted as saying by Bloomberg.
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