LAHORE: Following a resolution with the federal government over the withholding tax (WHT) system, which was mentioned in the federal budget, the flour milling industry has chosen to resume regular operations.
According to PFMA chairman Asim Raza, following a meeting with Minister of State for Finance Ali Pervaiz Malik and Finance Minister Mohammad Aurangzeb on Monday, the federal government and the PFMA agreed during negotiations that flour mills would not be subject to Section 153-A of the Income Tax Act and would instead sell flour under a commission system.
He claimed that the discussions held during a meeting chaired by Federal Minister of Economic Affairs Ahad Cheema continued to be fruitful, leading the flour millers to resolve that business will continue as usual throughout the nation.
The leaders of the four provincial chapters of the association as well as the chairman of the PFMA represented the flour millers during the negotiations.
The PFMA chairman described the specifics of the agreement, saying that flour dealers and retailers would charge a commission per bag for selling flour that was supplied by the mills, and that the WHT under the Income Tax Act would only apply to the commission amount.
He said that tax rebates on the flour business would be applied to the budget bill for the following year (2025–26) rather than 2024–25, and that wholesalers and retailers with yearly sales under Rs. 100 million would be included in the withholding tax net in the upcoming year.
At the beginning of the fasting month of Muharram, flour mill workers went on strike in protest at what they perceived as an attempt to turn them into “WHT collection agents.” They decided to postpone the strike in response to the Punjab administration’s guarantee that a meeting with the federal government would be set up to discuss a resolution following Ashura.
The millers contended that there could be no efficient WHT collection because the flour dealers were unwilling to provide the mills with their computerized national identity cards and tax status (filer or non-filer).
