Tuesday July 23, 2024

Fear of flour shortage grows as mills come to standstill

Govt has imposed up to 5.5% withholding tax on various stages of supply chain of flour in this year’s budget

By Jawad Malik
July 11, 2024
A representational image of a person working in a flour mill in Pakistan. — AFP/File
A representational image of a person working in a flour mill in Pakistan. — AFP/File

After mill owners announced to go on strike against the withholding tax, flour mills in major cities came to a standstill on Thursday, sparking fears of a wheat flour shortage.

The government had imposed up to 5.5% withholding tax on various stages of the supply chain of the basic commodity in this year’s federal budget.

Pakistan Flour Mills Association (PFMA) Central Senior Vice Chairman stated that the government had tasked them to collect 2% and 2.5% additional withholding tax on flour from non-filer wholesalers and retailers, respectively.

Furthermore, PFMA Chairman Asim Raza said reiterated that the millers would not bear the responsibility of collecting the withholding tax as it made the flour dearer by Rs200.

The PFMA said at least 1,725 flour mills had ceased their operation across the country, including 1,100 in Punjab, 300 in Khyber Pakhtunkhwa, more than 300 in Sindh and 25 in Balochistan.

Additionally, it also said flour consumption during summer was 40-45,000 tonnes in the country.

After the announcement of the strike by the PFMA against the tax, 73 flour mills of Gujranwala district are completely shut down, whereas, all 100 flour mills are closed in the four districts of the Multan Division, including 60 flour mills in Multan.

According to a spokesperson of the PFMA, due to the closure of flour mills in Faisalabad, the supply of 200,000 bags of flour per day has stopped, while all 10 flour mills in Kamalia city and four flour mills in Khushab district are closed as well.

On the other hand, the strike is being observed in Peshawar and Quetta too, where mills have been locked.

PFMA Chairman (South Zone) Aamir Abdullah said flour mills in Sindh had stopped grinding wheat and the supply of flour as well.

“Tax collection is the FBR’s job, we should not be made tax agents. Until our demands are approved, the supply of wheat products will remain closed,” he said.

The flour mills association sources warned that it was feared that the commodity would go scarce if the deadlock between the government and association persisted.

As per the association, flour bags of 5kg, 10kg and 20kg will not be prepared from today.

It should be noted that a few days ago flour mill owners had announced a strike, while holding a press conference, and said that they had tried to negotiate with the government. They had conveyed their demands to the government through talks, but negotiations failed.