New sales tax mechanism may raise ghee, cooking oil prices by Rs10-15 per kg

Ghee and cooking oil prices could rise by Rs10-15 per kilogramme following changes to the sales tax mechanism introduced in the federal budget, the Pakistan Vanaspati Manufacturers Association (PVMA) said on Wednesday.

PVMA Chairman Sheikh Umer Rehan said the expansion of the Third Schedule would shift sales tax collection on ghee and cooking oil to a system based on the maximum retail price.

He said the change would increase the tax liability of an industry already facing a substantial tax burden, with the additional cost ultimately being passed on to consumers.

Rehan said the association had asked the government to reduce taxes on edible oil and ghee in the budget to lower prices for the public. Instead, he said, the new measures had increased financial pressure on manufacturers and were likely to make both products more expensive.