Pakistan’s Dairy Industry Seeks GST Reduction to 5%

Pakistan’s dairy industry is urging the government to lower the General Sales Tax (GST) on packaged milk from 18% to 5%, citing severe economic strain and declining sales. The Pakistan Dairy Association (PDA) argues that the high tax rate is hurting farmers, reducing consumer access to nutritious dairy products, and threatening the sector’s stability.

The dairy industry, a key contributor to Pakistan’s agriculture, employs millions and supports rural livelihoods. However, recent posts on X highlight a 20% contraction in the sector, with soaring costs discouraging investment. The PDA warns that the current tax policy is failing to generate expected revenue while driving consumers toward unregulated, low-quality milk alternatives. A reduction to 5% GST, they claim, could stabilize prices, boost exports, and safeguard public health.

The government has so far resisted calls for tax cuts, prioritizing fiscal targets. Yet, with agriculture contributing 23.5% to Pakistan’s GDP, the dairy industry’s plea aligns with broader efforts to revive the sector. For instance, recent budget measures exempted fertilizers and pesticides from GST to ease farmer burdens. A similar relief for dairy could help restore growth and ensure affordable nutrition for consumers.

Published in SouthAsianDesk, June 25th, 2025

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