The Pakistan Poultry Association (PPA) has strongly opposed imposition of the reformed General Sales Tax (GST) on processed poultry products and has asked the federal government to continue with zero rating exemption in the forthcoming federal budget.
Former PPA chairmen Abdul Basit, Raza Mahmood Khursand and Khaleeq Arshad expressed these views in a joint news conference held at the Lahore Press Club. They reminded of a similar experiment conducted in 1996, which had caused shutdown of a large number of poultry farms and had forced the government to withdraw its own decision in 1997.
Raza Mahmood Khursand said that the government was considering imposition of a 15 percent GST on poultry feed, in addition to a withdrawal in the zero rating policy on processed chicken products. Furthermore, the government will continue exemption on chicken meat and eggs. He emphasised that this distortion will discourage value addition in the country, while poultry farming will become unviable. The Federal Board of Revenue (FBR) might collect some revenue through these measures, however, it will propel closure of the poultry industry, he added. He stated that poultry feed contributes 70 percent in the input cost of poultry farming and imposition of a 15 percent GST will significantly increase the cost of broiler and egg production. Responding to a question, Abdul Basit said that poultry product prices were directly proportional to demand and supply and the effect of GST could not be passed on to the consumers. He said that chicken prices had no relation with the production cost as poultry prices were driven by market forces or demand and supply principles. He grieved that closure of poultry farms will swell chicken prices by 100 percent, while price of meat and beef will also rise. Referring to current prices, he said that a day old chick was being sold at less than one-third of the price of broiler, already available at 20 percent less than the production cost. Imposition of reformed GST will heavily dent the poultry industry. Leaders of the PPA also staged a protest outside the Lahore Press Club.