Imposition of VAT may increase Pakistani poultry prices

The poultry market in Pakistan is likely to get even more volatile if the proposed Value Added Tax (VAT) is smacked on the sector.

Poultry price, which have risen from PKR140 per kg to PKR220 per kg in the last 40 days, is in no way likely to come down as was being expected by consumers. Let alone poultry prices, even egg prices are also staying at the higher level and are beyond the purchasing power of the common man.

According to Pakistan Poultry Association (PPA), if VAT is imposed in the next budget, it would cause unprecedented hike in poultry products. "Chicken per kg price will rise above PKR400 and an egg will be available for PKR18-20," said PPA chairman Mohammed Aslam.

Besides, he said, middle class and the poor would be deprived of getting cheap source of proteins. He said no country receives any tax on food items but the government wants cripple consumers' buy potential by imposing VAT on poultry sector under IMF pressure.

PPA chief urged the government, instead of putting irrational tax, should prop up PKR2 billion poultry industry. "The government should also advance soft loans to small poultry farmers for promotion of the industry." it asked. He pointed out skyrocketing power and gas rates are factors behind high cost of production.