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June 20, 2021

Tax cut on cold storages urged

 
June 20, 2021

KARACHI: The Pakistan Businesses Forum (PBF) has demanded the federal government to exempt the tax and general sales tax (GST) on the manufacturing of cold storages for the period of 10 years before the approval of the Federal Budget 2021/22, a statement said on Saturday.

This would address food security issue and increase perishable exports. Similarly, in the operational mode, five years tax holiday may be granted to the respective firm.

PBF Vice President Ahmad Jawad said that inflation in Pakistan is high with food prices fluctuating all the time. This is basically because Pakistan does not have proper food storage facilities, and seasonal demands put a strain on supplies, resulting in the ever-rising food prices.

In Pakistan, cold storages are filled only with potatoes and apples most of the time. Similarly, there is no food processing industry to increase the storage life.

For example, cold weather increases the demand for eggs, which naturally increases its prices, but if there is an egg powder processing unit, then during low demand, eggs can be converted into powder, which factories and bakeries can stock for use at a later stage, he added.

“This is needed not only to reduce food losses, which are significant in Pakistan, but also to help farmers get better incentives and income, better document the value chain, increase credit to farm economies and help achieve the overall competitiveness in the country’s rural sector.

The government has to increase the number of food processing industries. “Tomatoes and onions can be converted into paste, wheat into biscuits, fruit into juices and concentrates, etc, Jawad said.

The processed food will also be exported to Afghanistan and Central Asia, while it would also improve the food security of the entire region.