Beginning July 1, consumers will be required to pay an additional 50 rupees per litre for packaged milk after the government implements an 18% general sales tax, as outlined in the recent budget.
The new charge will impose a monthly additional expense of 1,500 rupees for daily milk consumers, escalating household financial burden.
Industry experts have raised alarms about the potential repercussions of the new tax, suggesting that if it remains unaltered, it could drastically contract the formal dairy sector by more than 70%.
Experts argue that the indirect sales tax could result in significant financial losses estimated at 23 billion rupees for farmers suffering due to poorly planned wheat imports during the interim government period.
Stakeholders within the nascent but formal packaged milk industry express deep concerns over the tax’s implementation from the next fiscal year. They fear it will further reduce the already limited consumption of packaged milk, which currently stands at only 10% of Pakistan’s population of over 240 million.
The decline in packaged milk usage could hinder the government’s efforts to formalize the economy, impacting the dairy sector and broader economic stability.
