Playing with people’s sentiments

LAHORE: As the budget has to be passed before June 30, lobbying for changes in taxes by different sectors is in full swing. Some affected sectors are even highlighting the health issues of segments that do not consume their products.

It seems that the government has decided to go with its original budget proposals. The amendments announced by the finance minister seem to be part of the government plan to satisfy its coalition partners.

The decision to keep duties on hybrid cars at last year’s level looks like surrendering to the elite class, particularly members of parliament who have agreed to accept other punitive measures if this concession is granted.

The withdrawal of proposed taxes on stationery will provide a sigh of relief to the education sector.While the tax debate is about to close in three days, many sectors like textiles, dairy and traders are still lobbying for withdrawing proposed measures. The salaried class having no lobby is just hoping that common sense will prevail, and they will be spared from additional taxes.

Pleas made by the Dairy Association of Pakistan have highlighted the fact that there are 40 per cent stunted children in Pakistan and over 29 per cent are underweight. This statement is largely true though the percentage on both counts is higher.

The association has linked these deficiencies to the lack of proper nutrition which again is correct, but their argument that after the withdrawal of exemptions on milk and milk powder, the prices of processed milk will go up and increase the percentage of stunting and underweight children is out of context.

These two problems (stunting and underweight) have existed among the children of the lower strata society for a long time, and these children never consumed packaged milk because they cannot afford it.

Another point worth noting is that stunting has been constantly on the increase in Pakistan since the last 15 years. During this period the penetration of packaged milk has greatly increased.

But it still is less than 20 per cent. The remaining 80 per cent consume loose milk. So, one thing is clear that levying duties on packaged milk will not impact the health of downtrodden children.Milk processors, according to experts, can nullify the impact of sales tax on processed dairy products if they change the packaging in which they supply milk.

The current packaging costs between Rs35 and Rs40 per litre while the proposed sales tax will also be in the same range. Some milk processors are retailing 250ml milk packs with expiry dates of one month.

This packing does not cost more than Rs5 (after printing and sealing). They can also market the same ultra heat-treated milk in that packing to reduce cost.The three months expiry date in tetra packed milk is not needed by consumers who buy milk on a daily or weekly basis. We are wasting hundreds of billions on packing processed milk, which is a drain on our economy and an undue strain on the pockets of consumers.