ISLAMABAD: The Senate Standing Committee on Finance came hard on the Pakistan Poultry Association (PPA) for unprecedented increase in chicken prices and suggested to the federal government to further lower duty on import of the feed.

The finance committee, led by its Chairman Senator Talha Mahmood, was briefed on Friday by PPA representatives. The committee also rejected a proposal to exempt political parties from filing tax returns and recommend reduction in prices of car up to 850cc, medicines and chicken meat. The government exempted nine items in the budget 2021-22. However, the association blamed that sales tax was increased from 10 per cent to 17pc on 54 items In budget FY22, sales tax has been increased to 17pc on import of hatching eggs which are imported from the United States. PPA said this will definitely increase the price of hatching eggs. The committee recommend the Federal Board of Revenue to review this duty on hatching eggs.

The association further said that sales tax hike will increase poultry feed prices by Rs2,500 to Rs3,000 per tonne.

Senator Kamil Ali Agha held PPA responsible for the current hike in poultry prices. Chicken meat is out of poor people’s reach, he said, adding that even marriage halls were closed due to the Covid-19 pandemic.

Representatives of the association linked the price hike with decline in production. “If demand did not increase then why did the prices went up,” Senator Agha questioned the logic of the association. “We sympathise with the poultry association but these people do not sympathise with the poor,” he commented.

Details sought on tax exemption for Fauji Foundation

The committee rejected the 17pc sales tax on poultry feed.

Officials of the Engineering Development Board (EDB) infor­med the committee that price of 660 cc vehicle was over Rs1.6 million in Pakistan. Car prices and taxes are low in India.

The committee was informed that localisation in small vehicles was at 65pc while total price of a small car carried a tag of 40pc from tax. The proposed reduction in taxes on vehicles up to 850 cc will reduce the cost of the vehicle. Large vehicles have 55pc localisation, the EDB officials.

The automobile association assured EDB that it will reduce the price of vehicles in line with the cut in taxes. It was approved that the committee to implement ministry of Industry and Production localisation programme.

FBR officials informed the committee that tax breaks on donations to charities are being scrapped. As a result, donors will be taxed by the FBR officials. The committee rejected the proposal to tax the donations.

The committee sought details from the FBR on the tax exemption for the Fauji Foundation. “Why is the Fauji Foundation being given tax exemption?” Senator Mohsin Aziz inquired from FBR officials.

Details of the foundation and tax exemption should be given to the committee, he further said.

The representatives of the Drug Regulatory Authority of Pakistan (DRAP) informed the committee that reducing drug prices is the federal government’s prerogative as it can only recommend. However, DRAP defended the increase in drug prices.

Senator Talha Mahmood said that medicine prices had been increased by 300-400pc. The price of a tablet has gone up from 6 paisa to 32 paisa, according to director DRAP. He further said that at 32 paisa, the price was said to have been increased by 400pc.

Senator Mahmood said that reduction in taxes should also reduce the prices of medicines. However, the pharmaceutical sector is not willing to reduce the prices of medicines in lieu of tax relief.

The committee also rejected a proposal to exempt political parties from filing tax returns. It recommended removing political parties from the tax exemption schedule.

The dairy association representative informed the committee that imposition of 17pc sales tax on dry powder milk will increase milk price up to Rs200 per litre. Senator Mahmood said that no food items including dry milk should be taxed.

The committee recommended five-year tax exemption to Larkana Industrial Area and approved a proposal to abolish tax exemption for bagasse and biomass power plants. The committee, however, rejected the proposal to abolish tax exemption on medical allowance of government employees.

Published in Dawn, June 19th, 2021