Following recent price reductions for flour and refined flour, the public received promising news that bakery items would become more affordable. However, this anticipation was curtailed by the upcoming fiscal year’s budget announcements.
The federal government has introduced a 10 per cent sales tax on various bakery items, including buns, vermicelli, sheermal, and others, as part of the 2024-25 budget. Sources close to the matter disclosed this development.
Retailers have voiced concerns regarding this tax imposition, predicting that the resultant price hikes will lead to customer dissatisfaction when bakery items see a temporary price reduction, leaving consumers to enjoy lower costs for only a brief period.
Moreover, this tax increase is particularly ill-timed as it coincides with the Eid festival, when items like vermicelli, a breakfast staple, are in high demand. Citizens have expressed their discontent, emphasizing that essential daily items and breakfast foods should be made more affordable, and they expect the government to implement measures that would progressively decrease inflation.
Bakery owners have reported that they only recently started complying with new pricing regulations mandated by the Punjab government. With the new tax regulations outlined in the budget, the public will likely receive further price adjustments unfavourably. For example, in Lahore, the cost of a small packet of vermicelli is set to increase from 150 to 160 rupees.
The price adjustments do not stop with vermicelli; a large packet, previously priced at 200 rupees, will now cost 220. Similarly, the price of a small packet of juice will rise from 130 to 250 rupees for a large packet. The Finance Bill has included several amendments to these sales tax increases, affecting many products sold in bakeries and sweet shops across the retail sector.
