Flour mills threaten strikes in case govt imposes tax

Say government will be responsible for any shortage in flour supply.

LAHORE:

Pakistan Flour Mills Association (PFMA) officials have threatened the government that it will strike in case the one percent tax on manufacturers – provisioned by the finance ministry in Federal Budget 2012-13 – is not repealed.

PFMA Punjab Chairman Chaudhry Abdul Jabbar, in a press briefing on Tuesday, said the decision will force the closure of flour mills. “Flour mills are already paying high manufacturing costs due to rising electricity tariffs and the severe energy crisis. The proposal for imposition of one percent tax on manufacturers will not be possible to bear, especially in the case of an open market. How is it possible for an ordinary store owner to collect one percent tax on each kilogram of flour sold and deposit such amounts in the government’s exchequer?” Jabbar asked.  “Ultimately, the burden will be transferred to mill owners and we are not in a position to bear another burden,” he complained.

“The government determines the price of raw materials for flour mills all over Pakistan. The government also determines the prices of wheat and four at which we sell,” he stated. “Necessary food products are tax-exempt in the entire world except Pakistan, where the government has already increased the support price of wheat due to which flour prices are surging. After the one percent tax deduction, price will rise further and the general public will suffer,” he said.

“We are starting to think about closing our businesses eventually. The government will be responsible for any flour shortages in the future,” he threatened.

Published In The Express Tribune, June 13^th, 2012.