The Pakistan Vanaspati Manufacturers Association (PVMA) has warned that ghee and cooking oil prices could increase by up to Rs15 per kilogram following changes to the sales tax mechanism introduced in the federal budget, according to media reports.
According to the association, the revised tax structure may lead to an increase of Rs10 to Rs15 per kilogram in the retail prices of ghee and cooking oil, potentially adding to the financial burden on consumers across the country. The PVMA has expressed concerns that the new taxation measures will raise production costs for manufacturers, which are likely to be passed on to consumers through higher prices.
PVMA Chairman Sheikh Umar Rehan, while expressing concern over the budget measures, said that the scope of the Third Schedule has been expanded under the Finance Bill. As a result, sales tax will now be collected based on the Maximum Retail Price (MRP).
He explained that under this new system, the tax burden on the ghee and cooking oil industry will increase further. Manufacturers will have little choice but to pass these additional costs on to consumers, leading to higher prices for ghee and cooking oil across the country.
The PVMA chairman noted that the ghee and cooking oil industry is already facing a heavy tax burden.
Before the budget was announced, the PVMA had formally requested the government to reduce tax rates on edible oil and ghee so that these essential commodities could remain affordable for the general public. However, rather than providing relief, the government has introduced measures that will impose additional financial pressure on manufacturers.
The PVMA stated that the new tax structure will significantly alter how sales tax is calculated and collected, which could negatively affect price stability in the market.
The association has strongly urged the government to reconsider this decision and provide relief to the industry in the budget so that food inflation can be controlled and the public can be protected from further financial hardship.
Read more: Quaid-e-Azam University to observe summer vacations from July 6 to August 30
