The Pakistan Flour Mills Association (PFMA) is on its second day of strike, with hundreds of mills across the country remaining closed on Friday. This has halted wheat grinding and flour supply, raising concerns about a potential shortage of staple food.
The federal government recently imposed a withholding tax of up to 5.5% on various stages of the food supply chain in its budget for the current fiscal year, which PFMA leaders claim has made flour more expensive.
Mills in cities such as Bahawalpur, Bahawalnagar, Jhelum, Kamalia, Sargodha, and Toba Tek Singh are among those that have shut down, disrupting flour availability in these areas.
Shahzad Qureshi, Senior Vice Chairman of PFMA’s Peshawar Division, stated in an interview with Geo News that the strike will persist until their demands are addressed. “The crushing has been stopped due to the increased tax on flour and wheat,” he noted. Qureshi also called for the lifting of the ban on wheat and flour deliveries from Punjab and the removal of check posts affecting these deliveries.
PFMA Chairman Asim Raza, speaking on the Geo News program “Geo Pakistan,” explained that while no direct taxes have been imposed on flour mills, they have been designated as withholding agents. “We are required to hold and deposit the amount we receive from dealers. When these dealers sell to retailers, they charge a 2.5% withholding tax for non-filers and 0.5% for filers. By the time payments return to the flour mills, they withhold 5.5%. This isn’t a tax; it’s an advance tax that will be refunded later,” he clarified.
Raza insisted that the withholding tax should be removed, warning that its continuation will lead to increased flour prices, ultimately impacting consumers. He highlighted the price trends, noting that while a 20kg flour bag was previously sold for Rs2,800 and 10kg for Rs1,400, current prices are Rs1,800 for 20kg and Rs900 for 10kg. However, he anticipates prices will rise again.
He emphasized that the strike is not aimed at causing trouble for the public or seeking confrontation with the government. “We’ve always argued that the flour milling sector should be exempt from being a withholding tax agent, unlike the fertilizer dealers and manufacturers who remain exempt. We cannot operate effectively under these conditions,” Raza concluded.
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