New Delhi: Milk prices in Pakistan have surged by more than 20% following the imposition of a new tax, making milk more expensive there than in many developed countries such as France and Australia. The price of ultra-high temperature (UHT) milk in Karachi supermarkets has reached 370 rupees ($1.33) per litre, surpassing prices in cities like Amsterdam ($1.29), Paris ($1.23), and Melbourne ($1.08), according to Bloomberg data.
The price rise is a direct result of an 18% tax applied to packaged milk, as part of recent taxation changes in Pakistan‘s national budget. Previously, packaged milk was tax-exempt. The new tax has led to retail prices rising by as much as 25%, bringing milk costs on par with those in developing countries like Vietnam and Nigeria, as noted by Muhammad Nasir, a spokesman for the local unit of Dutch dairy producer Royal FrieslandCampina NV.
The increase in milk prices is likely to add to rising inflation in Pakistan, where wages have stagnated, diminishing purchasing power. The higher cost of milk could also negatively impact child health, as about 40% of Pakistan‘s population lives in poverty.
Nasir highlighted the potential nutritional impact, stating that the price hike could deprive already malnourished populations of essential nutrients. Currently, around 60% of Pakistani children under 5 years suffer from anaemia, and 40% suffer from stunting.
This tax increase is part of Pakistan‘s efforts to raise taxes by 40%, the highest on record, to meet the conditions set by the International Monetary Fund (IMF) for a new bailout.
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