The Senate Standing Committee on Finance has raised serious objections to the proposed tax measures in the upcoming fiscal year’s budget, cautioning that they will contribute to inflation in the country.
According to news reports, during the committee meeting on Saturday, Committee Chairman Senator Saleem Mandviwalla voiced these concerns. The committee criticized the imposition of taxes on essential food items, including packaged and baby milk, and rejected the proposed taxes on locally produced baby food, infant nutrition, and packaged milk.
Mandviwalla announced that the committee would present its recommendations to the Senate on Monday. He highlighted that the government’s proposed taxes in the next fiscal year’s budget would lead to a 10% overall increase in inflation.
The committee opposed the suggestion of imposing an 18% sales tax on baby milk, with members expressing concerns about how such a measure could be justified in a country where 40% of children suffer from stunting. Anusha Rehman from the Pakistan Muslim League-Nawaz (PML-N) criticized the rise in sales tax on milk as inhumane and pointed out the lack of consultation before making the decision. Sherry Rehman from the Pakistan People’s Party (PPP) also supported this stance, as reported by Business Recorder.
During his budget speech, Finance Minister Muhammad Aurangzeb emphasized the crucial importance of nutrition in the first 1,000 days of a child’s life and the need to combat stunting. However, industry experts view the introduction of an 18% GST on locally produced infant formula, baby food, and child nutrition milk powders as counterproductive and inconsistent with the government’s stated priorities.
Given the current high inflation environment, it is important to recognize that locally produced infant formula, baby food, and fortified child nutrition milk powders are approximately 50% cheaper than imported alternatives. This affordability makes them more accessible to the general population without burdening foreign exchange reserves. Additionally, these products contribute to the purchase of 300 million liters of milk from local farmers annually.
