fbr to levy 18% sales tax on packaged food items starting july 2024
Published on: June 16, 2024.
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Chairman of the Federal Board of Revenue (FBR), Amjad Zubair Towana, has recently announced a new development regarding the sales tax on essential food items in Pakistan. From the next financial year, an 18% sales tax will be imposed on processed and packaged flour, pulses, rice, sugar, and spices.
This decision was unveiled during a meeting of the Senate Standing Committee, which was presided over by Saleem Mandvi Wali. Among the attendees was Sheikh Waqar Ahmed, a representative from the industry, who proposed extending the same tax treatment to locally produced baby milk. Sheikh Waqar emphasized the need for a gradual increase in the sales tax on baby milk to prevent a sudden spike in prices.
Chairman FBR, Amjad Zubair Towana, shed light on the fact that milk companies have consistently raised their prices over the past couple of years, increasing the burden on consumers while not contributing to the government’s revenue. Despite their significant price hikes, these companies have managed to evade taxation. Furthermore, a complete abolishment of zero rating is confirmed to be implemented from the next financial year.
Amjad Zubair Towana pointed out that imported milk is currently being sold at double the price of local milk in Pakistan. In light of this, he reiterated that the new 18% sales tax will be applicable to processed and packaged flour, pulses, rice, sugar, and spices. To be exempted from the tax, companies are challenged to reduce their prices by 18%.
The primary objective behind this move is to increase government revenue and ensure a fair contribution from all sectors by bringing more businesses into the tax net. By imposing sales tax on essential food items, the government aims to generate additional funds while maintaining a balance between taxpayers and consumers.
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**Source: [Pakistan Today](https://www.pakistantoday.com.pk) */(opens in a new window)*
