Packaged Milk Is Now 25% More Expensive Thanks to New Taxes

The price of packaged milk has increased by Rs. 75 per liter or 25 percent after the federal government’s pro-IMF budget went into full effect today. Packaged milk now costs Rs. 370 per liter compared to Rs. 295 per liter in the previous fiscal year due to the 18 percent sales tax and 2.5 percent tax on retailers. FrieslandCampina Engro Pakistan Limited has announced a price increase for its milk products, effective from July 1, 2024. The increase is attributed to rising production costs and economic factors impacting the dairy industry, the company said in its latest advertisement. The price for a 1000ml pack of Olper’s milk will be increased as per the new rates detailed below:   The rates of packaged milk being sold by other companies/ vendors have also increased with effect July 1. 2024, to pass on the impact of the 18 percent sales tax and 2.5 percent tax on retailers under Finance Bill 2024. The government has proposed to tax infant milk items not exceeding Rs. 600 per 200g at the rate of 18 percent. The total revenue impact will be around Rs. 95 billion (Rs. 75 billion standard milk + Rs. 20 billion infant milk). These rates are very high. However, Finance Minister Muhammad Aurangzeb at his post-budget briefing on 13 June said the middle class shouldn’t find it difficult to pay the 18 percent sales tax on milk products.