LAHORE: After an eighteen percent general sales tax goes into effect on July 1, the cost of packaged milk is expected to increase by Rs55 per litre.
It is anticipated that consumers will be severely impacted by the 18% General Sales Tax (GST), which could cause inflation to soar. Those who live in large cities and towns may be most affected, as their grocery bills may rise noticeably.
Furthermore, it is estimated that the indirect sales tax will cost farmers a significant amount of money—roughly Rs23 billion—because they are already dealing with the fallout from the government’s imports of wheat during the caretaker administration.
Stakeholders in the industry have voiced worries, claiming that the levy will reduce farmers’ profitability and make it harder for manufacturers to buy milk from them.
A source in the sector stated, “Manufacturers and other stakeholders in the country’s small yet regulated packaged milk market have raised apprehensions due to the government’s decision to impose an 18% sales tax on packaged milk.”
Expanding the tax base and removing subsidies to the energy sector are two ways that Finance Minister Muhammad Aurangzeb and Prime Minister Shehbaz Sharif’s economic team are looking for ways to increase government revenue. This is in line with what the IMF is requiring in order to get Pakistan, which is heavily indebted, a new loan facility.
