Mini budget bone for govt, bane for poultry farmersDecember 8, 2015
Karachi: Wrongful imposition of punitive duties on raw material of poultry industry will only result in becoming a burden for common man who is left with only one affordable protein source, chicken, says Pakistan Poultry Association (PPA). The industry as result of these duties will not be able to sustain the damage due to Govt’s decision.
PPA in a release here Wednesday questioned the logic behind additional 10% import duty levied on import of Live Poultry multiplying seeds – ‘Grandparents’, that produce Parents which subsequently produce Broiler Chicks, whereas seeds of all kind have been exempted from any additional tax.
Association expressed surprise that while additional import duty has been imposed on poultry seeds and raw material, finished chicken meat and its value added products are allowed to be imported duty free from Malaysia and on preferred lower rate of import duty from China and at only 5% duty from India, even though India has placed imports from Pakistan on their Sensitive List.
‘It would have been prudent to levy a regulatory import duty on import of finished poultry products rather than its seed and its inputs. It appears that imports are being encouraged,’ said the spokesperson of PPA.
‘The levy of additional 10% import duty has been levied on import of Live Poultry of the Heading 01.05 (weighing less than 185 grams), which includes only Grandparents. Grandparents are a multiplying seed, which produce Parents which subsequently produce Broiler Chicks which end up in Chicken meat on the table of the consumers,’ he said adding that seeds of all kind have been exempted from any additional tax but grandparents, though being seed, have been taxed.
Today, invariably chicken is cheaper than Dal and most of the vegetables too. The entire edifice of the poultry structure rests on the import of a handful of Grandparents, which could not provide any significant revenue to the government but would only increase the initial cost of the Grandparent farmers.
‘The Poultry sector is exasperated on the levy of further additional duties on its raw materials left, right and the front. It seems that in the eyes of the taxation authorities either the poultry products are very cheap, therefore, they can be taxed or they are not the requirement,’ said the spokesperson.
The Association is dismayed at the fact that probably the poultry sector is on the wrong side of those who matter in the chain of taxation.
Items falling under Fifth Schedule have been generally exempted but in the Budget Speech a specific exclusion was made to items of poultry sector for levying additional import duty.
The imported raw materials, which are used for production of value added chicken products have been subjected to an additional import duty of 5%. While raw materials have been generally exempted from additional tax, but the wrath of the government has fallen upon the poultry sector.
Yet another measure, which would increase the cost, is the levy of 30% regulatory import duty on import of corn, almost 70% of which is consumed by the poultry sector as a very important component of poultry feed. Poultry feed includes 40-50% corn. The increase in its cost would increase the cost of feed, which ultimately would increase the cost of chicken and eggs.
‘Do we have a great foreign exchange reserve?! We have negative trade balance with almost every country. The policies being adopted create only further trade imbalance,’ the spokesperson concluded.