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New tax sparks 20% surge in Pakistan milk prices, exceeding costs in developed nations

Milk prices in Pakistan have surged by over 20 per cent following the introduction of a new tax, making the essential dairy product more expensive than in many developed nations, according to a report by Bloomberg.

In Karachi supermarkets, the price of ultra-high temperature (UHT) milk has risen to Rs370 ($1.33) per litre. In comparison, the price stands at $1.29 in Amsterdam, $1.23 in Paris, and $1.08 in Melbourne, according to Bloomberg’s data.

This sharp increase is attributed to an 18% tax imposed on packaged milk as part of recent taxation changes approved in the national budget. Previously, packaged milk was exempt from tax.

Muhammad Nasir, a spokesman for the local unit of Dutch dairy producer Royal FrieslandCampina NV, noted that prior to this tax, milk prices in Pakistan were on par with those in developing countries such as Vietnam and Nigeria. The new tax has led to retail prices escalating by up to 25 per cent

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The hike in milk prices is expected to exacerbate inflation in Pakistan, where stagnant wages have already diminished purchasing power.

Additionally, the higher cost of milk may further deteriorate child health, a significant concern in a country where approximately 40 per cent of the population lives in poverty.



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