Saturday, December 2, 2023

Flour mills threaten to strike over tax issue

Flour millers on Tuesday threatened a two-day symbolic strike starting on Thursday unless the federal government removes the 17% sales tax from the choker and restores the previous rate of 0.25% of the income tax.

“If the demands are not met by the 30th, factories across Pakistan will be closed and the national supply of flour will be suspended,” said Asim Raza, the provincial head of the Pakistan Flour Mills Association.

He added that the billing tax issue appears to be moving towards resolution as the government acknowledged the mistake and promised not to implement it.

“Its formal abolition is included in the millers’ list of demands and any delay could result in a national strike,” warned Asim.

According to the millers, the government raised the price of wheat to make it easier for farmers. The price has been reduced from Rs 1,400 to Rs 1,800 per maund this year. This 30% increase in the price of wheat would naturally reflect the price of flour, increasing millers’ turnover by 30% – without increasing their income.

The second issue that prompted the millers to go on strike is the proposal to collect 17% of the sales tax on the choker – a by-product of milling wheat.

The millers would end up paying out of pocket and passing it on to consumers. Under this head alone, the price of a 20 kg bag would rise from Rs55 to Rs60 – depending on how much choker the mill extracts. It would be a disastrous increase in the price of flour and would create problems for everyone, including the industry. It is on this basis that the millers are demanding an end to this proposed tax,” Asim told his audience.

All wheat products and their by-products are exempt from sales tax and there are several court rulings in this regard. How and why the Ministry of Finance decided to slap, no one knows”, concluded Asim.

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