The federal government has proposed to impose an 18 percent sales tax on milk and fat-filled milk (presently zero-rated) in the new federal budget 2024-25.
According to the details, the government has proposed to tax infant milk items not exceeding Rs. 600 per 200g at the rate of 18 percent.
If these taxes are approved, the total revenue impact would be around Rs. 95 billion (Rs. 75 billion standard milk + Rs. 20 billion infant milk).
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Following his budget presentation a day earlier, Finance Minister Muhammad Aurangzeb at the post-budget briefing on Thursday said the middle class shouldn’t find it difficult to pay an 18 percent sales tax on milk products.
The revenue impact of Rs. 75 billion from the 18 percent tax on standard milk is the same as the budget allocated for parliamentarian schemes for the new fiscal year.
The price of milk is currently Rs. 290 per liter, but it is expected to rise to Rs. 342 per liter following the 18 percent sales tax.
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