Packaged food items set to become more expensive in Pakistan

KARACHI: The Federal Board of Revenue (FBR) has imposed an 18 percent General Sales Tax (GST) on packaged food items, including formula milk.

The decision was announced during a meeting of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla.

Chairman FBR, Amjad Zubair, informed the committee that the GST would apply to all packaged items sold at departmental stores and large retail outlets but would exclude unpackaged food items sold at general stores.

The committee recommended reducing the GST on formula milk from 18%, considering its importance for infant health.

Chairman FBR mentioned that the tax revenue from formula milk is substantial. The government is open to considering a tax rate reduction if companies lower their prices accordingly.

The committee also discussed the issue of unregistered outlets selling formula milk and recommended that these outlets be blacklisted.

It is important to note that the International Monetary Fund (IMF) previously urged Pakistani authorities to increase the general sales tax to 18 percent during four rounds of talks with the government.