Flour mills call off strike for now
The Pakistan Flour Mills Association (PFMA) called off its strike after high-ranking government officials, on behalf of Prime Minister Shehbaz Sharif, assured the association on Saturday that their grievances would be addressed within 10 days.
Talking to The Express Tribune, PFMA Senior Vice Chairman Central Chaudhary Amir Abdullah said flour millers have postponed the strike on the condition that taxation issues would be sorted out amicably within 10 days.
“However, we will resume our strike if our demands are not met in 10 days (till July 22). For now, however, all the flour mills should resume wheat grinding operations to restore the supply of the staple food nationwide,” he said.
In a short statement, the PFMA said, “After the intervention from the prime minister, a committee has been formed which would help us in normalizing the withholding taxes with our mutual understanding. This has been assured by the prime minister.”
The members of the committee include Minister for Law Azam Nazeer Tarar; Minister for Economic Affairs Ahad Khan Cheema; Federal Board of Revenue Chairman Malik Amjed Zubair Tiwana; and PFMA Chairman Central Asim Raza Ahmed.
The association had closed flour mills on Thursday, announcing they would continue the protest until the government withdraws the newly imposed withholding tax (WHT) and ends its condition of making mills agents of the FBR to collect WHT on its behalf from mills’ clients, including flour wholesalers and retailers.
The government has imposed exorbitantly higher rates of the tax on non-filers on the purchase of flour, impacting the poor segment of society the most.
It has imposed a 5.5% withholding tax on flour mills with effect from July 1, 2024—2.5% WHT on flour retailers (non-tax) and 2% on wholesalers (non-filers). It has also imposed 0.5% WHT on retailers (tax filers) and 0.10% on wholesalers (tax filers).
The association office-bearers said the new taxes would make wheat flour costlier by Rs8-10/kg and make bread unaffordable in these high inflation times.
They said the association has played a major role in bringing down flour prices from Rs150-175/kg to below Rs100/kg, but the new taxes are tantamount to undoing their efforts of providing affordable bread to the masses.
They said they brought down the flour prices by importing wheat from abroad instead of buying costlier wheat from the government under the quota system.
The PFMA also has reservations about becoming tax agents. Such a move may create serious legal issues and a law and order situation for them as many millers directly sell the staple food to individual retail buyers. “Why is the government creating a hassle for flour mills? If the FBR wants to collect the tax, it should do it itself,” the PFMA officials asked.
They said while the FBR, despite being the taxman, has failed to collect the WHT from wholesalers and retailers, how could flour mills succeed in collecting the tax?
“We don’t have the capacity to collect taxes. We are flour mills, not tax-collecting agents. The tax collection activities would add to our cost of production,” said an office-bearer the other day.