Fears are mounting over a potential flour shortage in the country, as the All-Pakistan Flour Mills Association (PFMA)’s nationwide strike entered a second day on Friday to demand the government withdraw the imposition of a new withholding tax on them in the budget for fiscal year 2024-25.
Speaking with media, PFMA Chairman Asim Raza warned of an indefinite strike if his group’s demand were not met. He claimed the new tax had made flour mills withholding tax collection agents and warned that if the tax remained in place, it would boost flour prices for consumers by up to Rs. 8/kg. Under the new budget, Rs. 600 tax has been imposed on Rs. 11,000 flour bag.
According to Raza, flour dealers are preferring to skip purchases entirely instead of sharing details on withholding tax. He also maintained that, thus far, neither the government, nor the Federal Board of Revenue had made any attempts to resolve the strike.
According to the PFMA, it represents 1,725 flour mills across Pakistan. It claimed the first day of the strike had already led to supply disruptions for grocery stores in Lahore, adding existing stocks would likely be exhausted within a week owing to the daily consumption of 45,000 tons of wheat nationwide.
Apart from a withdrawal of the new tax, the PFMA is also demanding an end to the ban on delivery of wheat and flour from Punjab, which the provincial government has implemented to curb wheat smuggling.