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Pakistan Industry Calls for Zero Tax on Poultry Products

12 September 2013

PAKISTAN - The Pakistan poultry sector has called for a zero tax on processed poultry meat products.

Pakistan Poultry Association (PPA) Chairman, Khalil Sattar, made the appeal to the Finance Minister to restore the 'Zero Rating' status for value-added, processed, frozen and packed poultry products in the best interest of both the sector and general population.

In a letter to Finance Minister, Ishaq Dar, The Nation of Pakistan reports the PPA Chairman stated that the withdrawal of zero-rating status to the sector has increased the cost of production of processed value-added chicken products by 20 rupees (PKR) to PKR40 per kilogram.

In the budget 2013-14, zero rating was withdrawn from both the products. However, subsequently, zero-rating on packed and all value-added milk products has been restored but zero rating on packed value added chicken products has not been restored.

Mr Sattar said: "The withdrawal of zero rating on processed chicken has given a further edge to imported poultry products and to the unorganised sector because imported chicken under Free Trade Agreement (FTA) with Malaysia is free of import duties and under FTA with China subject to 15 per cent import duty with sales tax exemption."

He added that presently, out of the total agricultural products, which is about 21 per cent of GDP, only cotton, wheat, oilseeds, partially milk and about one per cent of the poultry is in the tax net through processing and value addition, as rest of the produce is sold through unorganised, non-documented economy.

According to The Nation, the PPA Chairman added: "The only way of bringing the products into the tax net is by encouraging processing and value addition. The encouragement by way of providing fiscal incentives would help in documenting the agro economy to yield high revenues by way of Income Tax from processor, packing industry, distributors and so many other downstream industries."

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