18% Sales Tax to Be Imposed on Processed Foods and Baby Milk from Next Financial Year: FBR Chairman

This new policy aims to increase government revenue but is expected to raise the cost of essential food items and baby milk, impacting consumers across the country.

ISLAMABAD: In a significant policy shift, Chairman FBR Amjad Zubair Towana announced an 18% sales tax on processed and packaged foods including flour, pulses, rice, sugar, and spices, effective from the next financial year. The announcement came during a meeting of the Senate Standing Committee, chaired by Saleem Mandvi Wali.

Industry representatives, including Sheikh Waqar Ahmed, participated in the meeting and discussed the impact of this new tax policy. A proposal to impose an 18% sales tax on locally produced baby milk was also considered. Sheikh Waqar urged for a gradual increase in the sales tax, warning that a steep rise would drive up baby milk prices significantly.

Chairman FBR Amjad Zubair criticized milk companies for repeatedly hiking product prices over the past two years, burdening consumers while contributing nothing to government revenues. He emphasized that investors remain outside the tax net, and declared that the zero-rating policy would be completely abolished from the next financial year.

Read More: FBR Chairman Announces Stricter Measures, Sealing And Fines For Pos System Violations

Additionally, Zubair highlighted the disparity between local and imported milk prices, noting that imported milk sells for double the price of local milk. He suggested that if the companies were to reduce their prices by 18%, the tax could be more palatable to consumers.

This new policy aims to increase government revenue but is expected to raise the cost of essential food items and baby milk, impacting consumers across the country.