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Govt Reviews 18% GST on Packaged Milk Amid Dairy Sector Concerns
Food Security Minister Rana Tanveer Hussain assures stakeholders of reviewing the 18% GST on packaged milk after concerns over affordability, malnutrition, and industry losses.
ND
by News Desk
2025-03-07
Govt Reviews 18% GST on Packaged Milk Amid Dairy Sector Concerns

The federal government is considering a review of the 18% General Sales Tax (GST) on packaged milk, following concerns raised by the Pakistan Dairy Association (PDA) regarding its impact on affordability and investment in the sector.

According to a Press Information Department (PID) press release, National Food Security & Research Minister Rana Tanveer Hussain met with a delegation from the PDA to discuss the pressing challenges faced by the dairy industry. The discussion primarily revolved around the rising cost of packaged milk due to taxation and its broader effects on consumers, dairy farmers, and national nutrition.

Packaged Milk in Pakistan More Expensive Than in Europe

The 18% GST was imposed on packaged milk, which was previously tax-exempt, making it significantly more expensive. A Bloomberg report highlighted that the price of one litre of packaged milk in Pakistan now stands at $1.33, compared to $1.29 in Amsterdam, $1.23 in Paris, and $1.08 in Melbourne. This has led to concerns about accessibility, especially for low-income families.

With malnutrition already a critical issue in Pakistan, stakeholders fear that the increase in milk prices will further worsen the situation. A recent meeting with UNICEF representatives revealed that malnutrition costs Pakistan approximately 3% of its Gross Domestic Product (GDP), highlighting the economic and social implications of the crisis.

Dairy Industry Faces Rs23 Billion Loss

Beyond consumer affordability, the dairy industry itself is projected to suffer a major setback due to the tax. Estimates suggest that farmers could face losses of up to Rs23 billion, discouraging investment in the sector and threatening the livelihoods of those dependent on dairy farming.

During the meeting, the PDA delegation urged the government to reconsider the taxation policy, arguing that it was driving up costs and reducing demand. They emphasized that removing or reducing the GST would not only make milk more affordable but also encourage investment in the dairy sector.

Govt Promises Consultation and Relief Measures

In response, Minister Rana Tanveer Hussain reaffirmed the government’s commitment to supporting the dairy industry and ensuring food security. He assured stakeholders that consultations would take place with relevant authorities to explore tax relief options.

He further highlighted Pakistan’s strong position in the global dairy market, producing over 70 million tons of milk annually. The minister stressed the need to align the country’s dairy industry with international standards to enhance competitiveness, boost investment, and ensure long-term sustainability.

As the government reviews the taxation policy, industry players and consumers alike await a decision that could have far-reaching implications for Pakistan’s dairy sector and overall food security.
Tagged:

PakistanEconomy

MilkPrices

FoodSecurity

DairyCrisis

GSTReview
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