Tea Import Tax Concerns Raised by Karachi Chamber of Commerce

KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has urged the government to reconsider the implementation of a Minimum Retail Price (MRP) of Rs1200 per kilogram on black tea imports, citing potential adverse effects on lower-income households. The chamber’s president, Muhammad Jawed Bilwani, emphasized that the flat rate could exacerbate financial burdens on disadvantaged communities and legitimate importers.

According to Karachi Chamber of Commerce and Industry, the policy, aimed at ensuring tax compliance, could lead to inflated tea prices, disproportionately affecting the most economically vulnerable groups. During a meeting with the Pakistan Tea Association (PTA), Bilwani argued that a flat MRP disregards the varying import costs of black tea, which range from 0.80 cents to US$4.5 per kilogram. He highlighted that this could result in excessive sales tax evaluations, making tea unaffordable for many.

The KCCI meeting included key figures such as PTA Chairman Muhammad Altaf and KCCI Vice President Faisal Khalil Ahmed. The participants discussed the potential negative impacts of the MRP policy, noting that it could result in significant revenue losses for the national exchequer. Bilwani pointed out the misuse of tax exemptions in regions like FATA/PATA, where tea imports far exceed local consumption, leading to substantial tax evasion and loss of government revenue.

PTA Chairman Muhammad Altaf criticized the Federal Board of Revenue’s (FBR) decision to enforce the MRP, arguing that it oversimplifies the tea trade’s complexities and disregards its nature. Altaf called for sales tax calculations based on import value, as outlined in the Sales Tax Act of 1990, instead of the fixed MRP. He expressed concerns that continuing with the current policy could result in significant revenue losses by the end of the fiscal year.

Both the KCCI and PTA are seeking government intervention to address the issue, emphasizing the need for a nuanced approach to protect both the consumers and the tea trade industry from unnecessary financial strain.

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