Tax Relief

Poultry sector is demanding tax breaks for intermediate consumption with a purpose to maintain costs down

The central chairman of the Pakistan Poultry Association (PPA) Khalil Sattar called on Sunday for a tax cut on poultry input to avoid price volatility in poultry items and to keep poultry prices low for consumers.

“The continued prevalence of COVID-19, disruptions in the global and local supply chain including imports from poultry grandparents, market speculation, taxes and tariffs on poultry feed ingredients are the main reasons behind the rise in prices for local poultry products,” he said.

The global supply chain of the poultry industry also has an impact on poultry prices in Pakistan as it is linked to the global supply chain and imports inputs in particular from the European Union and the Middle East, ”Khalil Sattar told APP.

The PA chief said the government has included a tax break on the nine poultry items from three percent to nine percent in the 2021-22 budget to ease the poultry sector. In addition to the pandemic, the poultry sector had suffered huge losses in recent years due to other factors as well.

In response to a question, he replied that in this household the VAT on 53 poultry inputs was increased by 10 to 15 percent and on various drugs by 15 percent, which could lead to a price increase in the near future. In addition, various levies on raw materials used in the poultry sector have also been increased. He proposed lowering the sales tax on poultry items, especially chickens and eggs, to zero percent to contain the price hike.

Khalil Sattar said Pakistan’s exports are negligible due to fierce competition abroad and rising commodity prices in the country.

The PPA chairman said the country imported most of its raw materials, including feed ingredients like soybeans and other chemicals and vitamins.

“Our major global and regional competitors like China, India, Brazil, Argentina and many others enjoy government protection and a comparative advantage,” he said.

“The Pakistani government wants to increase exports, for which the poultry sector needs to be eased. At least we should be granted tariff disadvantages in order to minimize our input costs, ”he added.

The PPA chief said that currently poultry farmers are selling eggs or chicks at a much lower cost than the cost of production to minimize losses.

“There is huge potential in Pakistan as the poultry sector is growing 5 to 10 percent annually,” said Sattar, “but the sector is faced with cycles of growth and then a long period of depression that forces farmers to undercut their products the cost of selling production. “

He warned that egg and poultry prices could rise about 10 percent in the near future due to higher demand, lower supply and rising raw material costs. However, price peaks in the past two years have been acceptable compared to prices in neighboring countries.

The poultry sector is one of the largest agriculture-based sectors of the Pakistani economy, with investments exceeding $ 8 billion.

The poultry sector accounts for 40-45 percent of the country’s total meat consumption, he said. He said PPA would prioritize issues like high energy bills, rising taxes and high business costs.

He highlighted the need to address the many challenges the poultry industry is facing and hopes that PPA will continue to function as a dynamic and active body despite a very difficult environment and many hurdles the industry is facing.

He said that during the COVID-19 pandemic, several quarters, including the media, have spread speculation about some new diseases in poultry chickens that are distracting consumers from poultry products and causing huge losses to the poultry industry.

The poultry operator said the malicious campaign against the poultry sector had been launched against the norms from some quarters and not only softened the business environment but also harmed the general market situation in the country.

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