December 22, 2005

Pakistan considers sales tax exemption for dairy sector

Pakistan's ministry of finance has proposed a sales tax exemption as for its dairy sector, which is planning to invest Rs 40 billion in milk processing in the next ten years.

This is part of the Dairy Pakistan Policy Reforms package, which also suggested that total employment in the sector could grow from the existing 295,300 to more than 3.2 million in 2015 after the sales tax zero rating.

With the expected Rs 40-billion investment in the next ten years, an additional processing capacity of 20 million litres of dairy products annually would be achieved by 2015.

The government has viewed the diary industry as an engine of economic growth in Pakistan and the zero rating is seen as a potential market growth inducer through the development of a wider range of value-added products.