Government Withdraws Flour Taxes After Rigorous Protests

Just recently, the federal government of Pakistan decided that it was going to be withdrawing the proposed sales tax of 17% to be levied on wheat bran. In addition, it announced that a 1% rebate on the yearly sales of flour mills will also be abolished. These two decisions were made against the backdrop of flour mills protesting against the increase in taxes. 

The Federal Board of Revenue (FBR) issued a statement to clarify that the taxes had been prescribed for a minimum tax on a turnover basis. It added that the table has been included in the Finance Bill of 2021, in order to provide relief to those retailers who supply fast-moving consumer goods (FMCG). This also includes refineries, as well as flour mills. 

FBR also revealed that the world ‘flour mills’ had accidentally been omitted from the table and that this error would be corrected in the amended bill. Thus, the minimum tax that flour mills would have to pay would stay at 0.25% of the turnover, rather than 1.25%. The latter figure was the one that was being interpreted by people. 

The Bureau maintained that to boost the aim of the government to control inflation and provide maximum relief to businesses, the general sales tax (GST), placed on wheat bran will also be taken back. The Finance Bill had proposed that the figure be enhanced to 17% now but the suggestion was withdrawn. 

The flour mills all over the country began protesting against the increase in taxes and stopped washing wheat. They had planned to also stop the process of grinding wheat, starting today, as part of the second phase of their protest. 

As per the office-bearers of the Pakistan Flour Mills Association (PFMA), the mills had planned on shutting down operations completely on the 30th of June. They were also going to stop the supply of wheat to open markets, as well as Sahulat and Sunday Bazars. Moreover, they announced that if the government did not take back the proposed rise in taxes before the month is out, they will cut off supply completely.