Govt to review 18% GST on packaged milk: minister

• Govt to consult stakeholders on dairy sector challenges.
• Minister stresses aligning dairy industry with global standards.
• Investment in farms crucial for higher milk production.

ISLAMABAD: The government is set to review the 18% General Sales Tax (GST) on packaged milk to encourage investment and support the dairy sector, Federal Minister for National Food Security and Research Rana Tanveer Hussain said.

The minister made the assurance to a delegation of the Pakistan Dairy Association (PDA) delegation during a meeting on on Thursday, where the visiting side highlighted key challenges faced by the dairy industry, including the financial strain on dairy processors and farmers due to the GST.

The tax has resulted in increased costs for consumers and hindered investment in dairy farms, impacting overall milk production, the minister noted, according to a statement from the Press Information Department.

Minister Hussain acknowledged Pakistan's status as a leading milk-producing country with an annual output exceeding 70 million tonnes. 

However, he stressed that strategic investment and policy reforms were essential to unlocking the sector’s full potential. He reaffirmed the government's commitment to facilitating investment in dairy farms to boost milk production and improve product quality.

The PDA urged the government to reconsider the tax, citing its adverse effects on affordability and sectoral growth.

The federal minister assured the delegation that the Ministry of National Food Security and Research would consult stakeholders and explore measures to support the industry.

He emphasised that any tax relief would be designed to directly benefit both consumers and dairy farmers.

Hussain further reiterated the need for aligning Pakistan’s dairy sector with global standards to enhance competitiveness and attract investment. He stressed that without modernising the industry, achieving self-sufficiency in food security would remain a challenge.

The government, he added, would continue working on policy reforms to stabilise milk prices and promote sustainable growth through stakeholder consultations.