FBR's decision to levy a sales tax on milk will have adverse effects on the industry.
KARACHI: Pakistan is among one of the top milk producers in the world. The dairy industry makes a significant contribution to the GDP of the country and the household expense on milk is much more than the amount spent on a basic item of need like flour. This burgeoning industry has been able to flourish thanks to the favourable policies of the government, particularly through the subsidies given to it. This means that the industry is free from sales tax so as to allow milk to be sold at reasonable rates.
However, that may change soon if the Federal Board of Revenue’s (FBR) decision to levy a sales tax on milk is implemented. This move will have adverse effects on the dairy industry, particularly livestock farmers, who will no longer be able to sell milk at an affordable price. It will also affect the export potential of this industry, thus preventing Pakistan from becoming one of the key players in the global milk market. In the interest of the survival of the dairy and livestock industry, the FBR must reconsider and think about the consequences of this move.
Syed Ovais Akhtar
Published in The Express Tribune, May 30th, 2013.
