The Federal Board of Revenue (FBR) has imposed a general sales tax (GST) of 18 percent on packaged food products, including formula. The move was announced during a session of the Senate Standing Committee on Finance, chaired by Senator Saleem Mandviwalla.

Chairman FBR Amjad Zubair stated that the new tax will apply to all packaged goods sold in department stores and major retail chains. However, unpackaged food items available in general stores remain exempt from this GST.

The Senate Standing Committee on Finance proposed reducing the 18% VAT on infant formula. During the recent meeting, the committee proposed to reduce GST on infant formula.

Chairman FBR states that the GST is imposed on locally processed milk.

He argued that this milk formula is generally not used by poorer families. He added that many traders and distributors of canned baby milk in Pakistan are not registered.

Senator Farooq Naiq suggested blacklisting such a company for tax evasion. Moreover, Senator Saleem Mandiwala stated that majority of women in the country use formula milk for babies.

Chairman FBR stated that canned milk manufacturers have been increasing prices in the last three to four years.

He added that if formula manufacturers reduce their prices, the FBR could consider reducing the GST accordingly. He suggested that an 18% price reduction could lead to a corresponding reduction in taxes, providing much-needed relief to consumers.