ISLAMABAD: The coalition government has dropped a bombshell of Rs 250 billion on consumers who use canned milk in the budget of the next financial year.
The current government has targeted the dairy sector at a time when infant malnutrition has risen to 40 percent. The government wants to levy a general sales tax of 18 per cent on packed milk to meet the expenses of MPs’ schemes.
Chairman Federal Board of Revenue Malik Amjad Towana says that the government will get 75 billion rupees from this 18% GST. This amount is equal to the amount allocated for the schemes of members of assembly in the budget.
According to Pakistan Dairy Association, after this tax, the price of canned milk will increase by Rs. 50 to Rs. 70 per liter. Likewise, farmers will get an opportunity to increase the price of raw milk by Rs. 30 per liter.
The Pakistan Dairy Association estimates that the conventional sector accounts for only 8% of the milk sold in Pakistan. After the new tax, the price of branded milk will be Rs 340 per liter from July 1. After that, the consumers of branded milk will be forced to buy raw milk and thus the prices of raw milk, which are still Rs 100 per liter less than branded milk, will also increase. will go
Finance Minister Muhammad Aurangzeb said on Thursday that since packet milk is consumed by middle and upper middle class people, they can afford 18% GST.
A day after the post-budget press conference, Nepra has also announced an increase in electricity prices by 5.72 rupees per unit from July 1, which will cost the electricity consumers 570 billion rupees. 18% tax has also been imposed on Fed. This will further increase the prices of milk, meat and chicken.
Finance Minister Muhammad Aurangzeb had announced tax on “sacred cows” but in the budget he has put the burden of taxes on cows and buffaloes. They are putting a lot of pressure on the government to withdraw the taxes levied on them. They want the faxed tax to be collected from them with a small increase.
Pakistan Dairy Association says that by imposing 18% GST on this sector, this sector will be destroyed, which will have an impact on public health and farmers’ livelihood. The health of the people will also be destroyed. Unfortunately, in Pakistan, 40 percent of the population is already malnourished and 29 percent of the people are underweight. Open milk is the most widely used in Pakistan, according to recent scientific research, a large amount of open milk is adulterated. Almost a certain amount of this milk is harmful to human health.
According to the Dairy Association, 90% of people around the world use canned milk, while the situation is the opposite in Pakistan, where 90% of people are using raw milk. Bread has made a difference, the country’s economy has improved with investment in this sector, people have got jobs, people have access to nutritious and healthy milk, and the government has received income in the form of taxes.
Undoubtedly, taxes are necessary to run the country’s economy, but they must be fair. Especially in this environment where there is no tax on open milk. The best way to tax canned milk would be income tax, when GST is imposed on it, the sector will suffer as compared to open milk.
The dairy association fears that the proposed taxes in the budget will cause the sector to decline by 75%. Due to the decrease in the demand for canned milk, if milk is not bought from the farmers, they will also lose about 23 billion rupees. Due to the increase in the price of canned milk, people will be forced to buy unhealthy milk, and the profit of the canned milk companies will decrease. The income tax received will not go to the government.
If the government abolishes sales tax, not only this sector will flourish but the government will also get more revenue in the form of income tax.
