ISLAMABAD: The Pakistan Dairy Association (PDA) has urged the government to reconsider high taxation and duties on packaged milk and dairy products, warning that rising costs are limiting consumer access and driving the spread of low-quality milk in the market.
In a letter to the Ministry of Industries and Production, the PDA highlighted that despite Pakistan being the third-largest milk producer globally, heavy taxation is damaging the industry. The association pointed out that Pakistan is the only country in the world imposing an 18% general sales tax (GST) on packaged milk.
During a recent meeting with Special Assistant to the Prime Minister Haroon Akhtar Khan, a PDA delegation led by Fauji Foods Managing Director and PDA Chairman Usman Zaheer raised concerns over the challenges facing the dairy sector. FrieslandCampina Engro Pak Managing Director and PDA Vice-Chairman Kashan Hassan, PDA CEO Dr. Shahzad Amin, and other industry representatives were also present.
Dr. Shahzad Amin emphasized the critical role of milk in the average Pakistani diet, stressing that rising costs are contributing to malnutrition.
“There are only two milk sources for consumers: packaged and fresh. However, there is no proper enforcement of quality standards at the open market level,” he noted.
The PDA has called for a reduction in GST on packaged milk to ensure an affordable and steady supply while supporting the sustainability of the dairy sector. “We say that this is not an ordinary industry, and milk products like cheese, ghee, butter, cream, and lassi are not luxury items,” Dr. Shahzad added.
Since the introduction of the tax in the current fiscal year, the packaged milk sector has suffered a sales drop of over 20%. “The average milk processing was around 1,000 million litres last year, but after the imposition of the tax, volumes have dropped to around 800 million litres per day,” he revealed.
Industry representatives also pointed out that beyond taxation, rising electricity costs and high import tariffs on plants and machinery have further escalated business expenses. The PDA continues to push for policy revisions to stabilize the dairy sector and ensure the affordability of essential dairy products for consumers.
