Mini-budget to stymie poultry sector growth

LAHORE:

To address protein deficiency in Pakistan’s population and to produce additional poultry products, there is a definite need to expand the poultry sector, remarked Pakistan Poultry Association Patron-in-Chief Khalil Sattar.

In a statement on Wednesday, he said that the production of poultry products should be enhanced rapidly with low input costs. “However, the proposed mini-budget makes it completely impossible.”

The poultry industry had been growing at a pace of 8-10% annually for the last few years and contributing significantly to the country’s gross domestic product (GDP), however, the proposed taxes on poultry products would undo all the efforts made by the sector to reduce malnutrition, he said.

Ironically, “the steps being taken to increase revenue collection will result in negative growth of the poultry industry and trigger a decline in its revenue generation”.

Prior to the proposed mini-budget, a day-old chick, which cost $54 (cost and freight), attracted 3% customs duty and 2% additional customs duty, resulting in a tax impact of Rs486.

“The proposed sales tax of 17% will cost an additional Rs1,735 and the total tax impact will be Rs2,221 per chick,” he said. “Without chicks, no poultry production can take place.”

Similarly, he added that poultry feed currently cost Rs86,200 per ton, of which Rs8,000 entered the national exchequer in the form of taxes and duties.

Following the hike in sales tax to 17%, the tax on feed will rise by Rs900 per ton, said Sattar while expressing concern.

Furthermore, he decried that sales tax exemption on vaccines had also been withdrawn, which would increase the prices of medicines for chicks by Rs80-90. “All these measures will add to inflation.”

The imposition of sales tax on incubators would also not bode well for expansion plans of the poultry industry because taxes on inputs of poultry feed, vaccines and poultry machinery were no different from slapping sales tax on all forms of poultry farming, he said.

 

Published in The Express Tribune, January 6^th, 2022.

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