THE poultry industry has sought a review of the tax regime in the next year’s budget-making exercise. It wants the government to study how much the taxation is helping the government financially and how it is hurting the consumers and the poultry business.

There should be a balanced taxation policy and no business or industry should be taxed disproportionately, says a poultry farmer.

Till June 2013, the industry, free of import duties and taxes, grew between 8-10pc annually for more than a decade. But for the last two years, its growth has turned negative as more and more farmers, especially smaller and mid-level, are opting out because of running losses. The industry elaborates the extent and depth of tax regime’s severity by saying that some 16pc duty (10pc regulatory duty, 1pc import duty and 5pc normal import duty) is charged on one-day old chicks imported for grandparenting.

Some former small poultry farmers, however, complain that they have been edged out of the market by tough competition offered by large outfits being run with the latest techno0ligies. And consumers are currently seeing an upward trend in prices of poultry and its products.

In poultry, feed costs 70pc of the input investment. Here again, it is said that the government has imposed 22.10pc (regulatory customs duty of 10pc, 1pc import duty and 10pc sales tax) on soybean meal import. Almost 100pc soybean is imported to produce quality poultry feed. Regulatory import duty of 40pc (30pc duty and 10pc additional duty) is imposed on import of maize.

The industry details the extent and depth of tax regime’s severity by saying that some 16pc duty (10pc regulatory duty, 1pc import duty and 5pc normal import duty) is charged on one-day old chicks imported for grandparenting

Though maize is not imported regularly because of local production, but in case of domestic crop’s failure (as happened in 2014), the import becomes necessary.

These taxes have naturally taken the cost of production up, making chicken meat and eggs expensive. Owing to high cost of production, industry sources say Pakistan has failed to create any export market for its poultry products.

Its exports remain negligible. Even in the domestic market, international fast food chains import chicken meat instead of procuring locally. Over 70pc of the total poultry farming, 80pc of egg production, 85pc the feed production and bulk of the poultry processing units are located in Punjab. The industry consumes over 7m tonnes of agro-residues.

The industry thinks that Punjab, being a major beneficiary, should lead the way in convincing the federation for withdrawal, or at least downward revision of import duties, additional import taxes, and sales tax on poultry feed ingredients, plant and machinery etc

The import duty on fresh, frozen, chilled, processed chicken meat and value added products should be enhanced to support the local industry.

Published in Dawn, Business & Finance weekly, May 16th, 2016