PHOTO: FILE
In this regard, the IFC penned a letter to the Federal Board of Revenue (FBR), saying it was making efforts to protect children in Pakistan from stunted growth and nutrition-related issues, which were the result of polluted and substandard milk.
According to a copy of the letter available with The Express Tribune, the IFC pointed out that it was working in the dairy sector of Pakistan and was engaged in socio-economic and regulatory work.
The IFC expressed concern that due to regulatory issues in Pakistan, investment in important areas of the dairy industry such as cooling, food safety and milk processing was not flowing.
Conflict over removal of zero-rated facility persists
"Due to some other issues, this sector is not attractive enough for investment, hence, we suggest to the FBR that the zero-rated sales tax facility for loose and pasteurised milk should be restored in the next budget," said the letter. The letter also referred to a meeting held with FBR Chairman Shabbar Zaidi on May 22 in which implementation of the international practice in relation to the tax on pasteurised milk was demanded. "Work on the issue has been completed and it will be sent to the FBR shortly."
The IFC pointed out that in Pakistan pasteurised milk was tax-free from June 30, 2006 to June 2016. For pasteurised milk, it said, it was wrong to use words 'exempt sales tax regime' because internationally the words 'input tax sales tax regime' were used.
The IFC said in all developed countries, the dairy sector was kept tax-free and cited the example of Australia where milk, cheese and cream were GST-free.
Published in The Express Tribune, June 1st, 2019.
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