KARACHI: The Pakistan Tea Association (PTA) has raised concerns over the government’s decision to fix a Minimum Retail Price (MRP) of Rs1,200 per kg for black tea imports.
In response, Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Jawed Bilwani has urged the government to immediately withdraw what he calls an “unjust regulation.”
Bilwani pointed out that the MRP forces legitimate importers to pay higher taxes, making tea unaffordable for lower-income groups. “The MRP flat rate penalizes low-income urban and rural households, compounding their financial struggles amid rising inflation,” he stated during a meeting with the PTA delegation at the KCCI.
He explained that the flat rate policy fails to account for the variability in import costs. For instance, tea imported at $0.80 per kg will still be taxed at Rs1,200/kg, which would unnecessarily increase the price, making it less accessible to the public. Bilwani noted that the cost of black tea varies, with prices ranging from $0.80 to $4.50 per kg.
Additionally, Bilwani highlighted discrepancies in the taxation system, particularly regarding exemptions granted to Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA). “During 2023-24, 23 million kilograms of tea were imported under FATA/PATA exemptions, but 20 million kilograms were sold in the rest of Pakistan, depriving the national exchequer of Rs25 billion annually,” he said.
PTA Chairman Muhammad Altaf also voiced opposition to the MRP, arguing that tea imports should be treated as raw material, subject to sales tax based on import value under the Sales Tax Act 1990, rather than on the retail price. “Tea is imported in bulk, ranging from 5 to 80 kilograms per bag, and is processed before it reaches consumers,” Altaf explained.
He warned that the new MRP policy could lead to a price hike of Rs150 to Rs300 per kg, further reducing the affordability of tea for consumers.
