FPCCI Calls for Abolition of Tea Tax and MRP Regulations

Karachi: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the government to abolish the current maximum retail price (MRP) and tax exemptions on tea imports, arguing that the existing policies are detrimental to the industry and consumers alike. Atif Ikram Sheikh, President of FPCCI, emphasized that tea should be categorized as a basic necessity rather than a luxury, calling for immediate policy revisions to alleviate the burden on small and medium enterprises (SMEs) and consumers.

Mr. Sheikh highlighted that tea is improperly classified as a finished product during importation, leading to an onerous total duty and tax rate of approximately 70 percent. He argued that such high tariffs are unsustainable, especially for SMEs that are instrumental in processing and distributing tea.

Aman Paracha, Vice President of FPCCI and former Chairman of the Pakistan Tea Association (PTA), criticized the MRP set by authorities at PKR 1,200 per kilogram, noting that market prices actually range between PKR 800 and 900. This discrepancy forces SMEs to pay disproportionate taxes, which Mr. Paracha described as unfair and unjustified.

Mr. Paracha warned that if the MRP is not revised, consumers could face an increase of PKR 300 per kilogram for tea. He called on the government to support tea traders in maintaining low prices without compromising quality and availability.

Both leaders stressed that the MRP should be applicable only to final packaged products, not raw or unblended tea. They argued that imposing such a regulation at the import stage lacks economic and regulatory logic, advocating for a more flexible and supportive policy framework to ensure the affordability of tea for all socioeconomic groups.