KARACHI: Unilever Pakistan welcomed the bold decision by the government of Pakistan to stem smuggling of tea and provide relief to consumers. As per SRO 608(I)2012, general sales tax on black tea has been reduced from 16% to 5%. This will lower the price of tea making it affordable for all segments of society especially those who are at the bottom of the pyramid. The reduction in sales tax will also significantly reduce the incentive to smuggle which will enhance transparency and documentation of the economy as more than half of the tea consumed in the country is smuggled under the Afghan trade transit, a complaint Unilever and others have made on various occasions. The increase in volumes of the documented sector will create a level playing field for the formal sector while also encouraging new entrants and promote healthy competition. With prices reduced and smuggling curbed, the consumer will be the biggest beneficiary of this reduction.
Published in The Express Tribune, June 5th, 2012.
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