PPA opposes proposed sales tax on poultry feed

A government proposed sales tax on poultry feed and its ingredients has come under attack by the Pakistan Poultry Association which has said it should never be imposed to save the industry from the same disaster it faced in the late 1990s. Association Chairman Khalid Saleem Malik has already asked for intervention by the chairman of the Federal Board of Revenue to help the common man afford cheaper prices.
On Friday, he said the feed made up between 60 and 70 percent of the total cost of production of chickens and eggs. "The poultry feed remained sales tax free. It was subjected to the sales tax between July 1, 1996 and September 13, 1997. The steep rise in the price of the poultry feed due to imposition of sales tax has forced farmers to sell their products below their cost of production," he claimed. "Because of heavy losses, about 40 percent of farms closed down creating a sharp increase in the prices of chicken and eggs. And, therefore, the government withdrew the sales tax.
"It is now learnt that sales tax exemption granted in the Sixth Schedule to the Sales Act, 1990, is being withdrawn. Obviously, the sales tax on feed could increase the prices of chicken and eggs and cause a repeat of the 1996-97 situation where poultry farmers had to close down their farms."
He has also warned of serious repercussions that "could create more farm closures and increase the poultry products prices by leaps and bounds". The poultry sector has 285 hatcheries, 141 feed mills and more than 35000 layer, broiler and breeder farms and being labour intensive, it provides employment to over 1.5 million people. The Economic Survey of Pakistan says almost every family in rural area and every fifth family in the urban areas are associated with poultry production activities in one way or the other.
"The commercial poultry production has bridged the gap between supply and demand of animal protein. It has kept a check on the prices of mutton and beef. The poultry production in Pakistan is an important part of agro-industry and plays its role in food security of the country," he said. "We would like to highlight that the poultry production sector consumes about 3.5 million metric tonnes of agro residues such as wheat bran, rice tips, molasses, oil seeds, thus helping substantially in mitigating cost of production of flour, sugar, oil and rice milling."