Flour mills withdraw strike call; govt assures tax exemption

KARACHI: Flour mills have withdrawn their call of shutter-down strike as the government assured them that wheat bran would be exempted from the proposed sales tax, said a trade leader on Saturday.
“We are told that the ECC (Economic Coordination Committee of the Cabinet) will notify the exemption in its next meeting,” said Asim Raza Ahmed, central chairman of the Pakistan Flour Mills Association.
The Finance Minister Ishaq Dar had constituted a three-member committee to resolve the issue following the flour mills warned last week that they would go on shutter-down strike from Saturday (July 11).
Earlier, the government had proposed a five percent sales tax on wheat bran for registered taxpayers and seven percent for unregistered taxpayers.
According to the association, the proposed sales tax may increase flour bag price by Rs15/10kg.
Bran accounts for an average 20 percent of whole wheat. Livestock and poultry farmers also buy bran. And, the tax will increase their cost of production. Flour retail prices are variable across the country. The retail prices of 1.5 number flour and 2.5 number in Punjab are Rs37.50/kg and Rs35/kg, respectively.
In Karachi, 2.5 number flour is currently being sold at Rs40/kg, fine flour at Rs45/kg and maida at Rs50/kg, said Fareed Qurashi, general secretary of Karachi Retail Grocers Group.
There are around 1,400 registered members of the association nationwide.
Appreciating the government decision, Ahmed said other countries do not impose taxes and levies on edible items.
About the withholding tax on banking transactions, he said the government should abolish this for the agriculture sector.