Flour mills across Pakistan have halted wheat grinding and flour supply starting today (Thursday) in protest against the newly imposed withholding tax, raising fears of a potential flour crisis.
Withholding Tax and Its Impact
In the budget for 2024-25, the government introduced a withholding tax on various stages of the staple food supply chain, increasing costs by up to 5.5%. The Pakistan Flour Mills Association (PFMA) leaders have voiced their concerns, stating that this tax hike will make flour more expensive.
Key Figures:
- Central Senior Vice Chairman of PFMA: Highlighted the government’s requirement for mills to collect an additional 2.5% and 2% withholding tax on flour sales from non-filer retailers and wholesalers, respectively.
- PFMA Chairman Asim Raza: Emphasized that mills would not bear the responsibility of collecting these taxes, as it would increase flour prices by Rs200 per bag.
Nationwide Strike
The PFMA reports that approximately 1,725 flour mills have ceased operations:
- Punjab: 1,100 mills
- Khyber Pakhtunkhwa: 300 mills
- Sindh: Over 300 mills
- Balochistan: 25 mills
Regional Impacts:
- Gujranwala District: 73 flour mills shut down
- Multan Division: All 100 mills closed, including 60 in Multan
- Faisalabad: Supply of 200,000 flour bags per day halted
- Kamalia City: All 10 mills closed
- Khushab District: All four mills closed
- Peshawar and Quetta: Mills locked and operations ceased
PFMA’s Stance
PFMA Chairman (South Zone) Aamir Abdullah stressed that tax collection is the Federal Board of Revenue’s (FBR) responsibility, not the mills’. He declared that the supply of wheat products would remain halted until their demands are met.
Demands:
- Abolition of the 4.5% withholding tax on the flour supply chain
- Removal of the 5.5% withholding tax on flour mills
PFMA leaders argue that the withholding tax collected on behalf of the FBR exceeds the grinding charges earned by the mills, making it financially unsustainable for them to operate.
Failed Negotiations
Efforts to negotiate with the government have been unsuccessful. Despite holding discussions with FBR officials via video link and Zoom, no resolution was reached.
The strike has led to a suspension in the preparation of 5kg, 10kg, and 20kg flour bags. PFMA warns that if the deadlock continues, the country could face a severe shortage of flour.
Conclusion
As the flour millers’ strike continues, the government and the PFMA must find a resolution to prevent a looming flour crisis that could significantly impact the nation.
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