Islamabad: The federal government says it will review the 18 percent sales tax imposed on canned milk as it is being said that Pakistan is the only country in the world where the highest tax is imposed on canned milk.
This was assured by Finance Minister Muhammad Aungazeb during a meeting with a delegation of the Pakistan Dairy Association, which requested the Finance Minister to reduce the 18 percent sales tax imposed on canned milk to 5 percent as imposed in many other countries of the world.
In this regard, the delegation also apprised the Finance Minister of various independent surveys and review reports that negate the idea that the tax imposed in Pakistan is at par with other countries around the world and also that the consumers of canned milk across the country belong to the wealthy class.
According to reports and surveys, two-thirds of consumers belong to the lower class whose monthly income is less than 50 thousand, it should be noted that the government has imposed 18 percent sales tax on canned milk and other related products, which aimed to earn additional revenue of 50 billion rupees and after the implementation of the sales tax, the price of a can of milk increased by 70 rupees per kg or 28 percent and the new price has reached 350 rupees per liter.
People associated with the dairy industry said that since the implementation of the tax in July, the sale of canned milk has decreased by 20 percent and is likely to decrease by another 14 percent during the second half of the financial year.
The delegation also informed the Finance Minister that there is no tax on milk and other dairy products in the United States, Canada, Australia, Bangladesh and the United Arab Emirates, besides that canned milk is also exempt from tax in India.
While Sri Lanka has a sales tax of 8 percent, the UK has a sales tax of 9 percent and Germany has a sales tax of 7 percent, Pakistan is the only country where the highest sales tax of 18 percent has been imposed.
On this occasion, Finance Minister Muhammad Aurangzeb said that the government is aware of the problems of the dairy industry and the tax in this regard will be reviewed soon.
