ISLAMABAD: Seeking rationalisation of the taxation system, the Pakistan Dairy Association (PDA) has informed the government that high taxes and duties have resulted in elevated prices, which in turn are limiting the consumption of packaged milk and dairy products.
In a letter to the Ministry of Industries and Production, the association maintained that Pakistan is the third largest milk producer. Still, high taxation is damaging the industry and leading to the spread of low-quality milk.
The PDA has highlighted that Pakistan was the only country in the world with an 18 per cent general sales tax on packaged milk.
In a recent meeting, a delegation headed by Fauji Foods Managing Director and PDA Chairman Usman Zaheer met Special Assistant to Prime Minister Haroon Akhtar Khan and apprised him of issues the packaged dairy industry is confronting.
FrieslandCampina Engro Pak Managing Director and PDA Vice-Chairman Kashan Hassan, Dr Shahzad Amin, CEO PDA, Noor Aftab, Head of Corporate Affairs TetraPak and Dr Muhammad Nasir.
The PDA maintained that milk was part of the primary diet, and only due to the high cost, the general public faced malnutrition.
I talked to Dawn PDA Chief Executive Dr Shahzad Amin, who said there were only two milk sources for the consumers: packaged and fresh. However, there was no proper enforcement of quality standards at the open market level.
He said that the PDA has demanded the government reconsider the taxation policy on packaged milk, advocating for a reduction in GST to ensure a steady milk supply at affordable prices for consumers while supporting the dairy sector.
“We say that this is not an ordinary industry and milk products like cheese, ghee, butter, cream, lassi, etc., are not luxury items,” he added.
The tax was imposed in the current fiscal year, causing a drop of over 20 pc in packaged milk sales.
“The average milk processing was around 1,000 million litres last year, but after the imposition of the tax, the volumes dropped to around 800m litres per day,” Dr Shahzad disclosed.
The industry has maintained that apart from high taxes, the rising cost of electricity and import tariffs on plants and machinery added to business costs.
Published in Dawn, March 23rd, 2025
