ISLAMABAD (APP) - Federal Minister for National Food Security and Research Rana Tanveer Hussain has underscored the need for rationalizing taxes and bringing about structural reforms in the dairy sector to improve affordability, ensure safe nutrition, and support farmers in the country.
He was speaking at a pre-budget consultation jointly organized by Sustainable Development Policy Institute (SDPI) and Pakistan Dairy Association, said a press release issued here Sunday. The minister said livestock accounts for nearly 60 percent of the agriculture sector and holds significant potential for both domestic nutrition and exports.
He acknowledged that taxation policies, particularly sales tax on dairy products, had affected production and growth. “Softening of tax regime can help increase both production and revenue,” he suggested.
Rana Tanveer noted that reducing General Sales Tax (GST) on milk was not difficult, thus proposals like pilot projects for pasteurization and the establishment of “safe milk cities” are under consideration. He said improving milk quality and formalizing the sector would be key priorities going forward.
In his welcome remarks, SDPI Executive Director Dr Abid Qaiyum Suleri suggested multiple taxation scenarios and called for placing processed milk in a third schedule. He warned that rural milk collection centres were shutting down, since pricing of processed milk directly hits loose milk markets.
Usman Zaheer Ahmad, Chairman of Pakistan Dairy Association, highlighted that 40 percent children in Pakistan suffered from stunting due to malnutrition, despite milk being the most widely consumed animal protein.
He said the sector remains 98 per cent informal, with limited quality controls. He warned that 18 percent GST in 2024 caused 27 per cent decline in formal dairy sector.
He proposed reducing GST to 10 percent and bringing part of the informal economy into the tax net, which could generate up to Rs 250 billion in revenue.
Earlier, SDPI Head of Ecological Sustainability and Circular Economy Unit, Zainab Naeem, said the consultation aimed to bring together government, private sector and civil society to address food insecurity and link the dairy sector with nutrition.
She emphasized that milk should be treated as a basic nutritional necessity rather than a luxury item. She called for strategies to enhance affordability and accessibility for low- and middle-income households.