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Pakistani consumers who prefer packaged milk must pay an additional Rs50 per liter due to 18% General Sales Tax (GST) implementation in the new budget.
As of July 1, this new policy will be in effect. Industry insiders have cautioned that the proposed 18% sales tax on packaged milk might have terrible consequences and could lead to a 70% reduction in the formal dairy sector if it is not abolished.
Indirect sales taxes are anticipated since farmers lost at least Rs23 billion and are still recuperating from the government’s caretaker setup’s poorly thought-out wheat imports.
Industry sources have highlighted not buying milk from farmers due to their profit erosion, indicating that the formal dairy industry helps farmers improve their living standards with proper purchases of milk.
“Pakistan is a country where 40 percent of children are suffering from issues like abnormal height, 29 percent are underweight while 18 percent are scrawny because of malnutrition. About 90 percent of more than 240 million Pakistanis consume fresh unprotected milk while only 10 percent use packaged milk,” they said.
“The dairy industry is a staunch supporter of taxation for the country’s development, but there must be a level playing field for the stakeholders to compete,” they stated.
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