Flour shortage feared as millers go on strike against withholding tax

Govt has imposed withholding tax on different stages of supply chain of staple food by up to 5.5%, says PFMA

Shopkeeper sits on his flour shop waiting for customer in the Lahore on July 10, 2024. —Online
Shopkeeper sits on his flour shop waiting for customer in the Lahore on July 10, 2024. —Online
  • PFMA senior leader: we have been tasked to collect more taxes.
  • PFMA chairman claims 1,500 flour mill owners have gone on strike.
  • Supply of 200,000 bags of flour per day has "stopped" in Faisalabad.

Flour mills in several cities of the country have stopped wheat grinding and flour supply across the country from today (Thursday), prompting fears of a flour crisis, as they observe a strike against the newly-imposed withholding tax.

In the budget 2024-25, the government has imposed withholding tax on different stages of the supply chain of staple food by up to 5.5%, the flour mills association leaders have said, making the product more expensive.

Pakistan Flour Mills Association (PFMA) Central Senior Vice Chairman had said that the authorities had also asked the mills to collect another 2.5% and 2% withholding tax on the sale of flour from non-filer retailers and wholesalers, respectively.

Meanwhile, PFMA Chairman Asim Raza reiterated that the mills would not bear the responsibility of collecting the withholding tax as it made the flour dearer by Rs200.

The PFMA said at least 1,725 flour mills had ceased their operation across the country, including 1,100 in Punjab, 300 in Khyber Pakhtunkhwa, more than 300 in Sindh and 25 in Balochistan.

Additionally, it also said flour consumption during summer was 40-45,000 tonnes in the country.

After the announcement of strike by the PFMA against the withholding tax, 73 flour mills of Gujranwala district are completely shut down, whereas, all 100 flour mills are closed in the four districts of the Multan Division, including 60 flour mills in Multan.

According to the spokesperson of the PFMA, due to the closure of flour mills in Faisalabad, the supply of 200,000 bags of flour per day has stopped, while all 10 flour mills in Kamalia city and four flour mills in Khushab district are closed.

On the other hand, the strike is being observed in Peshawar and Quetta too, where mills have been locked.

PFMA Chairman (South Zone) Aamir Abdullah said flour mills in Sindh had stopped grinding wheat and the supply of flour as well.

“Tax collection is the FBR’s job, we should not be made tax agents. Until our demands are approved, the supply of wheat products will remain closed,” he said.

The flour mills association sources warned that it was feared that the commodity would go scarce if the deadlock between the government and association persisted.

As per the association, flour bags of 5kg, 10kg and 20kg will not be prepared from today.

It should be noted that a few days ago flour mills owners had announced a strike, while holding a press conference, and said that they had tried to negotiate with the government. They had conveyed their demands to the government through talks, but negotiations failed.