Pakistani consumers who prefer packaged milk will need to pay an additional Rs50 per liter due to 18% General Sales Tax (GST) implementation in the new budget.

This new policy will be implemented from July 1, Business Recorder reported.

Industry sources have warned that the proposed 18% sales tax on packaged milk could be disastrous, and if not withdrawn, may cause the formal dairy sector to shrink by over 70%.

The imposition of indirect sales taxes is expected due to at least Rs23 billion in losses for farmers, who are still recovering from the government’s poorly planned wheat imports during the caretaker setup.

Industry sources have highlighted not buying milk from farmers due to their profit erosion, indicating that the formal dairy industry helps farmers to improve their living standards with proper purchases of milk.

“Pakistan is a country where 40 percent of children are suffering from issues like abnormal height, 29 percent are underweight while 18 percent are scrawny because of malnutrition. About 90 percent of more than 240 million Pakistanis consume fresh unprotected milk while only 10 percent use packaged milk,” they said.

“The dairy industry is a staunch supporter of taxation for the country’s development, but there must be a level playing field for the stakeholders to compete,” they stated.

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