Flour mills warn of strike from 11th

PFMA demands withdrawal of WHT, refuses to act as ‘agents of FBR’

KARACHI:

The Pakistan Flour Mills Association (PFMA) has announced to observe a countrywide shutter-down strike for an indefinite period from July 11 (Thursday) if the government did not withdraw the withholding tax (WHT) imposed on different stages of the supply chain of the staple food by up to 5.5%, making the product expensive by Rs8-10 per kilogramme.

Surprisingly, the government has imposed an exorbitantly high rate of WHT on the income tax returns non-filer flour mills, impacting the poor segment of the society the most.

Talking to The Express Tribune, Chaudhary Amir Abdullah, the PFMA central senior vice chairman, said the finance ministry had imposed a 5.5% WHT on the sales of flour mills.

In addition to this, the mills have been asked to collect another 2.5% and 2% WHT on the sale of flour from non-filer retailers and wholesalers, respectively.

On behalf of the Federal Board of Revenue (FBR), the mills have also been assigned the task to collect 0.5% and 0.10% WHT on sale of flour from income tax return filer retailers and wholesalers.

Malik Iqbal, a senior member of the PFMA executive committee, said the decision to call a shutter-down strike had been taken during a meeting of the flour mill owners from across Pakistan.

A majority of the 915 members of the association attended the meeting held in Lahore on Saturday.

They will not observe the strike only in case the government reverses the decision of imposing the WHT.

Iqbal elaborated that the strike call was not only to protest against the imposition of the WHT on flour mills but also to make them collect the tax from their buyers on behalf of the FBR.

“Why should the flour millers face such a hassle? If the FBR wants to collect the tax, it should do it itself.”

He continued that the government had also asked the flour millers to write down the NTN numbers of their buyers as well.

“Becoming tax agents for the FBR might bring serious consequences for the flour millers. It might even create a serious law and order situation for them as many millers directly sell flour to individual retail buyers.”

Iqbal said the members of the association had decided if the government did not withdraw the two decisions before Thursday, they would observe a countrywide shutter-down strike until it accepted both the demands.

“The government has announced relief packages for farmers saying that they provide food. But on the other hand, it is playing with the end-consumers and flour millers, who are performing their duties of supplying the product to the people.”

According to the Pakistan Bureau of Statistics, wheat flour (2.5 number) surged on an average by 10.57% across the country in the week ended July 4, becoming expensive to Rs1,970.40 per 20 kg bag. This translates into a Rs98.52 per kg hike.