Lawmakers in Senate React Over 18% GST on Baby Milk, Fortified Children Milk Powder

The Senate Standing Committee on Finance has raised serious concerns about the proposed tax measures in the budget for the next fiscal year, warning that they will fuel inflation in the country.

Committee chairman Senator Saleem Mandviwalla made these remarks during the committee meeting on Saturday, news reports stated. The committee was critical of imposing taxes on basic food items, including packaged and baby milk, and rejected the proposed taxes on locally produced baby food and infant nutrition, as well as packaged milk.

Mandviwalla stated that the committee would make recommendations to the Senate on Monday. He noted that the government’s proposed taxes in the budget for the next fiscal year would result in a 10 percent increase in inflation across the board.

The committee rejected the proposal to impose an 18 percent sales tax on baby milk, with members voicing concerns about how such a measure could be allowed in a country with a 40 percent stunting rate. Anusha Rehman of the Pakistan Muslim League-Nawaz (PML-N) criticized the increase in sales tax on milk as cruel and noted that no consultation was held before making the decision. Sherry Rehman of the Pakistan People’s Party (PPP) also supported her stance, according to a report published in Business Recorder.

Finance Minister Muhammad Aurangzeb, in his budget speech, highlighted the critical importance of nutrition during the first 1,000 days of a child’s life and the need to combat stunting. Despite this, the introduction of an 18% GST on locally produced infant formula, baby food, and child nutrition milk powders is viewed by industry experts as counterproductive and inconsistent with the government’s stated priorities.

In the current high-inflation environment, it is important to note that locally produced infant formula, baby food, and fortified child nutrition milk powders are about 50% cheaper than imported alternatives, making them more accessible to the general population without posing a burden on the foreign exchange reserves.