Chicken production: Poultry association calls for zero-rating restoration

Wants tax exemption citing increased cost of production, importance of sector.

LAHORE: In a bid to promote the sector, the Pakistan Poultry Association (PPA) has called for the restoration of the zero-rating.

Zero-rating is referred to the status given to the inputs that are tax-exempted.

The association pointed out that Pakistan is the 11th largest broiler producer in the world with production of 1.02 billion per annum, while it currently processes only 4% of the total live broiler produced.

As part of its budget proposal, the poultry body has stated that the promotion of this sector will result in price stability and earn foreign exchange through exports.

It will also help increase documentation in the sector, increasing the country’s revenue as well.

The proposal recommended that the exemption should be provided only to those processing plants that are part of the corporate sector, have a slaughtering and a value-addition unit within the same premises.

Absence of zero-rating

The withdrawal of zero-rating has increased the cost of production by Rs10-40 per kilogramme of processed chicken and value-added products. Inputs for value added products are subject to 15-30% import duty plus 17% sales tax.

Import of value-added chicken products falling under PCT heading 1601 under the free trade agreement (FTA) with Malaysia are duty free, imports from China attract 10% and 16% import duty under PCT Heading 1601 and 1602, respectively. From India, the duty is only 5%.

Since signing FTAs, a number of fast-food chains have started importing value-added chicken products from Malaysia and China.

Published in The Express Tribune, May 5^th,  2015.

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