Beginning July 1, 2024, the cost of packaged milk in Pakistan will rise by Rs50 per litre due to the implementation of an 18 percent General Sales Tax (GST) in the new budget.
Industry experts caution that this tax could severely impact the formal dairy sector, potentially shrinking it by over 70 percent if it remains in place.
Furthermore, the shift to an indirect sales tax instead of a direct income tax is anticipated to cause a loss of at least Rs23 billion to farmers, who are still suffering from the repercussions of the government’s poorly managed wheat imports during the caretaker period.
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According to industry stakeholders, this tax will erode profits to the point where buying milk from farmers will become unfeasible.
Manufacturers and other entities involved in Pakistan’s small but documented packaged milk industry have expressed serious concerns about the government’s decision to impose an 18 percent sales tax on packaged milk starting from the next fiscal year.
