18% sales tax threatens dairy sector

The government on Thursday assured a review of the imposition of an 18% sales tax on packaged milk, as it turned out that Pakistan has the highest tax on branded milk in the world and two-thirds of consumers earn less than Rs50,000 a month. The assurance to review the high tax rate was given by Minister for Finance Muhammad Aurangzeb during a meeting with the Pakistan Dairy Association—the representative body of the packaged milk industry. The PDA requested a reduction of the sales tax rate to 5%, aiming to bring it in line with most countries. The association also shared the findings of various independent surveys with the finance minister, which dispelled the myth that the sales tax on dairy products was in line with international standards and that only wealthy people consume packaged milk in Pakistan.