Pakistan Dairy Association (PDA) approached the Prime Minister and Finance Minister of Pakistan through a letter to request the withdrawal of 10 percent sales taxes on fat filled milk products classified under Eighth Schedule of the Sales Tax Act, 1990. Major products categorized under Fat Filled Milk category in Pakistan encompasses tea whiteners and fortified milk based formulae for growing children to address malnutrition.
"This policy will not only damage the dairy industry but will also force consumers to go back to adulterated and unhygienic loose milk due to increase in the price of tea whiteners and other fat filled milk products of basic nutrition for growing children," Zulfiqar Khalid Shaikh, Chairman, PDA said while elaborating on the consequences of proposed sales tax on fat filled milk products.
He further added, "Tea whitener is predominantly used by poorer segment of the society as an alternative to unhygienic and adulterated loose milk which is available within their affordability". He emphasized that fortified milk based formulae were manufactured keeping in view the micronutrient deficiency (Iron, Vitamins and Minerals) among children that are indispensable for growth and development. Higher taxes on these products will only result in shifting the burden upon the common man.
Despite milk being such an essential commodity, formal sector providing safe and hygienic milk has been only limited to 5% of the total milk consumption in Pakistan. Milk is part of an integrated, closely interlinked food economy requiring a unified approach to broad socio-economic policy, infrastructure and investment. There is ample opportunity in this sector for growth, and to improve the livelihoods of millions of small farmers associated with it.
Shaikh further added, "The surge in animal feed prices will hurt the small farmers the most. The government needs to abolish the duty and taxes imposed on animal feed to help uplift this lot. But in order for the industry to expand and be competitive, the dairy sector has to come under the right regulatory and taxation regime." Therefore, it's being urged by the PDA to remove the proposed 10 percent sales tax on fat filled milk products and restore exempt sales tax regime. As any restricted policies would not only penalize the industry but also hinder further investments in the sector.-PR