ISLAMABAD: The Federal Board of Revenue (FBR) has implemented an 18% General Sales Tax (GST) on packed food items, including formula milk.
Briefing the Senate Standing Committee on Finance, led by Senator Saleem Mandviwalla, Chairman of the FBR Amjad Zubair said that the GST will be applicable to all packaged goods sold in departmental stores and large retail outlets, while unpackaged food items in general stores remain exempt.
Recognizing the vital role of formula milk in infant health, the committee recommended a potential reduction in the 18% GST rate on this product. Chairman Zubair acknowledged the significant tax revenue generated from formula milk sales, indicating openness to revisiting tax rates contingent upon reductions in retail prices by manufacturers.
The committee also addressed concerns about unregistered outlets vending formula milk, proposing their blacklisting to regulate this sector effectively.
Earlier, the International Monetary Fund (IMF) had urged Pakistani authorities to increase the GST to 18%, emphasizing reforms in the sales tax collection system, which currently divides responsibilities between federal and provincial authorities.
