ISLAMABAD: Hundreds of flour mills across the country, which had postponed a nationwide strike over the implementation of source tax until July 22, will resume “normal” operations from today, Sunday, easing fears of flour shortage, state-run Radio Pakistan said.
Hundreds of flour mills across Pakistan on Thursday responded to a call by the Pakistan Flour Mills Association (PFMA), which represents over 900 flour mills, and went on strike against the 5.5 percent withholding tax imposed on flour mill sales in the federal budget for 2024-25, which came into effect on July 1.
According to the PFMA, the government has directed flour millers to collect 2.5 percent withholding tax on sales of essential goods to retailers (non-declarants) and 2 percent withholding tax from wholesalers (non-declarants). According to the association, flour millers must also collect 0.5 percent withholding tax on sales of flour from retailers (declarants) and 0.10 percent withholding tax from wholesalers (declarants).
A PFMA delegation met a high-level government committee formed by Prime Minister Shehbaz Sharif on Saturday to discuss the strike, after which the PFMA announced it would postpone it until July 22.
“The flour milling industry will resume normal operations across the country from tomorrow (Sunday) to ensure supply of wheat products to the market,” Radio Pakistan reported on Saturday.
The PFMA delegation briefed the committee on the ongoing strike, levy of withholding tax and its impact on the industry and people, Radio Pakistan reported.Meanwhile, the government committee was attended by Minister of State for Finance Ali Pervaiz, Minister for Economic Affairs Ahad Cheema, Minister for Law Azam Nazir Tarar and Chairman Federal Board of Revenue (FBR) Amjad Zubair Tiwana.
“The committee has listened to their concerns and assured them that a positive resolution will be reached by the 22nd of this month,” the state broadcaster said.
The attack comes as Pakistan navigates a rocky road to economic recovery amid double-digit inflation and a deepening macroeconomic crisis as the South Asian nation scrambles to secure foreign investment from friendly nations to keep its fragile $350 billion economy afloat.
The tax budget, which aims to raise tax revenue to 13 trillion rupees ($46.66 billion) this fiscal year, about 40 percent higher than last year, was rejected by almost all major trade groups and opposition parties, the unpopular step coming as Pakistan’s government negotiates with the IMF, which has made tax reform and higher revenue a central premise of a new loan program.
According to the PFMA, Pakistan has 1,725 flour mills and the country’s wheat flour consumption is around 45,000 tonnes per day.
This week’s strikes have halted flour supplies to grocery stores across Punjab, India’s most populous state, with stocks on the market expected to last just a week.
