In a move to regulate tea market in Pakistan amid soaring inflation, the government has established a minimum retail price of Rs1,200 per kilogram for tea.
The Federal Board of Revenue (FBR) issued a notification formalising the price hike, which will apply to both imported and locally supplied tea across the country. This adjustment means that sales tax on tea will now be calculated based on this new baseline, with any additional price increases further impacting the sales tax calculation.
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Sources close to the FBR indicate that this measure may lead to additional hikes in retail tea prices, potentially placing further strain on consumers already facing inflationary pressures.
Pakistan’s inflation rate has recently edged up, reaching 7.2% in October, with food prices contributing significantly to the rise. The Pakistan Bureau of Statistics (PBS) reported that this inflation rate exceeded market forecasts, hinting at ongoing economic challenges despite signs of easing in underlying inflation pressures.
While core inflation — excluding volatile energy and food prices — declined to 8.6% in urban regions, rural areas saw core inflation still elevated at 11.7%. This suggests that, although some relief is present, underlying inflation remains a concern for both urban and rural consumers.
