Pakistan to review 18% tax on packaged milk to boost investment

March 07, 2025 (MLN): The government is committed to addressing the challenges in the dairy sector, particularly by reviewing the impact of the 18% General Sales Tax (GST) on packaged milk, which has led to increased costs for consumers and financial strain on dairy processors and farmers.

This was stated by Federal Minister for National Food Security and Research Rana Tanveer Hussain when a delegation from the Pakistan Dairy Association met with him to discuss key challenges faced by the dairy sector.

The meeting highlighted pressing issues in the industry, including the 18% GST on packaged milk and the need for investment in dairy farms to boost milk production.

Minister Rana Tanveer Hussain emphasized that Pakistan is among the leading milk-producing countries, with an annual production exceeding 70 million tons.

However, he acknowledged that the sector requires strategic investments and policy reforms to unlock its full potential.

The minister stressed the need to facilitate the Pakistan Dairy Association (PDA) in investing in dairy farms, which would not only increase milk production but also improve the overall quality of dairy products. 

The PDA delegation urged the government to reconsider the GST on packaged milk, citing its adverse impact on affordability and investment in the sector.

Minister Rana Tanveer Hussain assured that the Ministry of National Food Security and Research would consult stakeholders and explore ways to support the industry, ensuring that any tax relief directly benefits both consumers and dairy farmers.

Furthermore, Minister Rana Tanveer Hussain reaffirmed his commitment and resolve to pursue policy and taxation reforms in the dairy sector that are in line with global best practices.

He emphasized that aligning Pakistan’s dairy industry with international standards would boost investment, ensure sustainable growth, and enhance the competitiveness of local dairy producers in the global market.

Minister Rana Tanveer Hussain concluded that without the development of the dairy sector, achieving self-sufficiency in food security would remain a challenge.

He reaffirmed that investment in dairy farms is crucial for enhancing milk production and ensuring high-quality dairy products.

The government will work towards policy reforms to modernize the dairy industry and stabilize milk prices through consultations with stakeholders, he added.

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