Senate of Pakistan Protects Packaged Milk Zero Rating

The proposed National Budget 2024-25 in Pakistan initially suggested an 18% sales tax on packaged milk to increase government revenue. However, following the intervention of the Senate of Pakistan, it has been recommended to maintain the zero rating for packaged milk and dairy products. This decision aims to support the dairy sector in providing safe and affordable milk to consumers by withdrawing the proposed sales tax amendment.

Milk is a crucial part of the human diet, offering a wide range of nutritional benefits. Dairy products are packed with essential nutrients such as protein, calcium, and vitamins, which play a vital role in maintaining overall health and preventing various diseases. Despite being a leading milk consumer, Pakistan faces challenges due to the widespread availability of loose, unregulated milk, leading to high levels of malnutrition and chronic diseases.

Pakistan's informal milk supply chain poses significant health risks due to contamination and adulteration, underscoring the importance of transitioning towards packaged milk for improved public health outcomes. While the country boasts a large dairy herd that produces a substantial amount of milk, over 90% of it enters the market informally, compromising safety and quality standards.

Formalizing the milk supply chain not only ensures public health safety but also benefits farmers by offering fair prices and a steady demand for their products. Imposing an 18% sales tax on packaged milk could have adverse economic and social repercussions, potentially driving consumers towards cheaper yet unsafe alternatives, leading to job losses and reduced government revenue.

Stakeholders in the dairy industry advocate for taxing milk through income tax rather than sales tax to sustain the viability of the formal sector and support sustainable economic growth. Globally, many countries have transitioned from loose to packaged milk to guarantee safety and adhere to international standards, highlighting the significance of safe and regulated milk consumption.

Maintaining the zero rating for packaged milk in Pakistan is a crucial step towards ensuring the availability of safe and affordable dairy products for consumers. By prioritizing public health and supporting the formalization of the milk supply chain, Pakistan can enhance food safety standards, promote economic stability for farmers, and safeguard the well-being of its population.