Milk prices in Pakistan rose by over 20% following the implementation of a new tax in the federal budget, making this essential dairy product more expensive than in countries like France, Australia, and others, according to a report by Bloomberg on Thursday.
In Karachi supermarkets, Ultra-high temperature (UHT) milk now sells for Rs370 ($1.33) per liter. This contrasts with prices of $1.29 in Amsterdam, $1.23 in Paris, and $1.08 in Melbourne, as reported by Bloomberg’s data.
The increase came after an 18% tax was imposed on packaged milk as part of recent tax reforms passed in the national budget last week. Previously, milk was exempt from such taxes.
Before these changes, milk prices were on par with those in developing countries such as Vietnam and Nigeria, according to Muhammad Nasir, a spokesperson for the local division of Dutch dairy producer Royal FrieslandCampina NV, cited by Bloomberg.
The escalation in milk prices, coupled with other tax adjustments, has sparked concerns in a country already grappling with record inflation in recent months. Although inflation has slowed somewhat recently due to a high base effect, experts believe the new budget could reignite inflationary pressures.
Critics have lambasted the increased taxation on goods like milk, arguing that it will negatively impact child nutrition.
“It will deprive nutrition to a population already afflicted by malnutrition,” Nasir remarked, as quoted by Bloomberg.
