Daily Times

The price of flour is likely to face an increase of Rs67/20-kg after July 1, following hike in three taxes related to the flour milling industry through the Finance Bill 2021-22, said the Pakistan Flour Mills Association (PFMA) on Monday.

Chairman PFMA Asim Raza said that prices of the flour are likely to go up after July 1, seeking concessions in the budget 2021-22.

The increase in turnover tax is expected to increase the price of a 20kg bag by Rs30 while the increase in sales tax on bran is expected to increase the price of each 20kg bag of flour by Rs67.

He detailed that one percent rebate on annual sales of flour mills has been abolished, the sales tax on bran sales has been increased by 10% and the sales tax on import of machinery used for making flour has been increased by 7%. The turnover tax on wheat has been raised to 1.25 percent,” Chairman PFMA Asim Raza said, adding that a 17 percent tax is being imposed on the choker, which will come into force from July 01. He said that if the government refuses to withdraw these taxes then they would be forced to increase the flour prices from July.

Separately, in a letter to Minister for Finance Shaukat Tarin, Asim Raza described the tax hike as the FBR’s error and requested him to maintain the current rate of taxes. The Flour Mills Association in Lahore is also expected to hold a press conference today (Tuesday).

Raza has told Tarin that at present the turnover tax imposed on the flour milling industry has been included in the lowest rate of the schedule under which 0.25% turnover tax is applicable on mills.

In the next financial year’s budget, flour mills have been excluded from the lowest rate schedule and will now be subject to 1.25% turnover tax. If the new rate of turnover tax is implemented, the price of a 20kg flour bag may increase by Rs30 from July 1.