Flour mills threaten to go on shutter-down strike

KARACHI: The Pakistan Flour Mills Association (PFMA) has threatened to go on shutter-down strike from Saturday if the government does not withdraw sales tax on wheat-husk and tax cash withdrawal from banks, association central Chairman Asim Raza Ahmed said.
Earlier, the government has imposed five percent sales tax on husk for registered taxpayers and seven percent for unregistered taxpayers.
Similarly, the government has imposed 0.6 percent tax on cash withdrawal from banks for non-taxpayers.
Ahmed said that the flour mills have given three days ultimatum to the government to withdraw taxes. "If positive response is not received, the mills would stop washing wheat on Friday and then stop production from Saturday," he said.
Almost all the buyers of husk, mostly animal and poultry farmers are unregistered taxpayers and the tax may push flour millers to bear the cost of the tax, he said.
Similar is the case with 0.6 percent tax on cash withdrawal, as almost all the farmers dealing in wheat sales are unregistered taxpayers. This tax has pushed the price of wheat higher.
"We {flour mill-owners} have stopped buying wheat four days ago {to avoid buying costly wheat}," he said.
He said this is very unfortunate that the government has imposed such taxes on edible items. "Edible items are exempted from paying any taxes worldwide."
"The flour mills determine flour price keeping in view many factors, including losses from wheat-husk…the sales tax would increase losses of the mills," he said.
"On an average, the flour mills bear a loss of around Rs15 per 10kg bag due to imposition of tax," he said.
"Impact of {the} two taxes comes to Rs2/kg of flour," Mian Mehmood Hasan, chairman, Sindh-Zone, PFMA, said after attending the meeting of the central executive committee of the association.
"Husk accounts for around 20 percent on an average in wheat," he said.
There are around 1,400 registered members of the association nationwide, which produce thousands of tonnes everyday, he added.