KARACHI: Pakistan Poultry Association (PPA) has submitted its budget 2016-17 proposals to Federal Board of Revenue (FBR), seeking exemption from regulatory duty on the import of grandparent chickens.
The PPA Chairman Khalid Saleem Malik submitted the proposals to FBR Member Rehmatullah Khan Wazir and informed him that the entire edifice of the chicken production is dependent upon this very small number of grandparents that are being imported.
He said that it is to be noted that in last November, amendments are brought about in the tariffs to raise additional revenue by imposing regulatory import duties and a 10 percent regulatory import duty is levied on live poultry weighing less than 185 grammes falling under PCT Heading 0105-1100 which are essentially day old grandparent (GP) stocks. He said that the GP stocks are the foundation of poultry production sector, which are not being produced within the country. Earlier, the import duty was five percent. However, now there is five percent import duty plus 10 percent regulatory duty with a total being 15 percent, he added. He informed that there are only three genetic companies in the world, which produce these and sell them at a very high price ranging from $25-30 per chick for the production of parent stock of females and males.
Khalid said, “There are already an import duty of five percent; an additional 10 percent would only increase the cost of the seed, which produces parent stocks and parent stocks produces day old chicks which subsequently produce broilers that are consumed by consumers including the lower income group as the chicken at times is even cheaper than pulses and vegetables”. The PPA chairman showed concerns over the levy of 30 percent regulatory import duty on the import of corn. He said, “This would further increase the cost of production of poultry products as almost 70 percent of the locally produced corn is consumed by the poultry sector as a very important component of poultry feed”.
He said, “In the past 11 years, not a single gramme of corn was imported. Last year, unfortunately, the spring crop was damaged due to late sowing of corn because of the field being occupied by potato, which resulted into substantial damage to corn because of the late harvest and arrival of the monsoons. Local farmers have suffered heavy losses to the best of our knowledge and as also confirmed by corn seed suppliers, the sowing is about 25-30 percent less”.
He said the poultry feed includes 40-50 percent corn adding that the increase in its cost has already adversely increased the cost of feed, which ultimately would increase the cost of chicken and eggs. The chairman said that already more than 30-40 percent farmers mix their own feed on their farms adding that the levy of sales tax on feed would encourage others to switch over to home mixing of feed defeating the purpose of levying sales tax. He said the levy of sales tax on poultry feed was experimented in 1996 resulting into almost 45-50 percent closure of poultry farms rapidly increasing the prices of poultry. The government of Prime Minister Nawaz Sharif on taking over charge had ordered the withdrawal of levy, he added.
He said that the poultry sector which had embarked upon modernisation by using imported plant and machinery which are subjected to zero percent import duty and zero percent sales tax are now subject to 5 percent import duty plus a 10 percent sales tax plus 1 percent additional duty with a total being 16 percent which increases the initial capital cost substantially.
The PPA chairman said Pakistan is the 11th largest producer of broilers in the world. He asked for the continuation of sales tax exemption on poultry feed, sunflower seed meal, rapeseed meal and canola seed meal.
The PPA chairman also complained about the unavailability of level playing field to them against imported chicken products. He said poultry sector provides employment to over 1.5 million people predominantly in the rural areas. He said, “We also request to enhance import duty on fresh, frozen, chilled, processed chicken meat and value added products”. He also made a strong recommendation that poultry processing and feed milling sector should not be subjected to sales tax.