Karachi Chamber of Commerce Urges Government to Reconsider Tea Pricing Regulation

KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has called for the immediate withdrawal of a new Minimum Retail Price (MRP) regulation on black tea imports, arguing that the policy will place undue financial pressure on lower-income households. This call comes in response to concerns raised by the Pakistan Tea Association (PTA) over the flat rate of Rs1200 per kilogram for imported black tea, which affects both sales tax and withholding tax.

According to Karachi Chamber of Commerce and Industry, President Muhammad Jawed Bilwani emphasized that the fixed MRP would unfairly impact the poorest segments of society, exacerbating the financial burden already intensified by rising inflation. Bilwani made these remarks during a meeting with a PTA delegation, which included Chairman Muhammad Altaf and other key representatives, at the KCCI headquarters.

Bilwani proposed that a more nuanced approach be taken, suggesting that the flat rate could lead to inflated sales tax evaluations even for low-cost tea, thereby making the staple unaffordable for many consumers. He highlighted that the cost of imported black tea varies significantly, from as low as 0.80 cents to as high as US$4.5 per kilogram.

The KCCI president also pointed out discrepancies in tax exemptions for certain regions, such as FATA and PATA, which he claims are being misused, resulting in significant revenue losses for the national exchequer. He noted that a vast quantity of tea imported under these exemptions is distributed across Pakistan, depriving the government of substantial tax revenue.

PTA Chairman Muhammad Altaf also voiced his opposition to the MRP policy, arguing that it oversimplifies the complexities of the tea trade, which involves processes like blending and packaging. Altaf called for the sales tax to be based on the import value rather than a uniform MRP, warning of potential revenue losses if the policy remains unchanged.

The KCCI and PTA hope for swift government intervention to address these concerns, which they believe will protect both tea traders’ interests and national revenue.

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