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The Pakistan Tea Association (PTA) has issued a warning that the Federal Board of Revenue’s (FBR) newly established minimum retail price (MRP) of Rs. 1,200 per kilogram for imported tea could lead to a significant price increase of Rs. 150-300 per kilogram.

Chairman Mohammad Altaf expressed concerns that this potential price hike might exacerbate tea smuggling activities. The association highlighted that the MRP does not adequately reflect the global tea prices, which vary from $0.50 to over $3 per kilogram depending on the type and quality. Additionally, the bulk nature of tea imports complicates the standard pricing model imposed by the FBR.

Tea is an essential and affordable staple for millions of Pakistanis across various socio-economic backgrounds. The chairman warned that higher prices could drive consumers towards low-quality, smuggled tea. He also pointed out that imported tea is already subject to an 18 percent general sales tax, and any additional tax burdens could further strain consumers.

The association has urged the government to classify imported tea as “raw material” under the Sales Tax Act of 1990 for purposes such as blending, mixing, or packaging. They propose that the sales tax should be applied to the import value rather than a fixed retail price.

Furthermore, the chairman cautioned that the fixed MRP could disrupt the domestic supply chain and potentially halt commercial imports altogether, impacting the availability of tea in the market.

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