Pakistan’s Poultry Sector: How Taxes Are Affecting a Vital Industry

Pakistan’s Poultry Sector: How Taxes Are Affecting a Vital Industry

There is no denying the prevalence of poultry in Pakistani cuisine, whether it be in the form of grilled broast, chicken biryani, or a straightforward omelet. It’s a means of subsistence, not just food. More than 1.5 million people are employed in Pakistan’s poultry industry, which also makes a substantial contribution to the country’s food security. Taxes and regulatory ambiguity, however, are currently putting pressure on this sector despite its vital role.

The Backbone of Our Food Chain

Pakistan’s poultry sector is one of the largest and fastest-growing agri-based industries. It includes everything from:

• Broiler farms
• Layer (egg) production units
• Hatcheries
• Feed mills
• Processing and packaging businesses

The poultry industry is largely self-reliant, supplying more than 40% of our total meat consumption and producing billions of eggs each year. With the rising prices of red meat, poultry has become the most affordable source of protein for many households.

Taxation Challenges: What’s Going Wrong?

Poultry used to benefit from a relatively tax-friendly environment, especially because of its role in food security. But in recent years, the tax net around the sector has expanded. Here’s where the pressure is building:

1. Sales Tax on Inputs
   • Poultry feed, vitamins, and vaccines — which were once zero-rated or tax-exempt — are now facing a 17% general sales tax (GST) in some cases.
   • This directly raises production costs, which are subsequently transferred to the final customer in the form of higher chicken and egg prices.
2. Minimum Turnover Tax:
   • A poultry company must pay the minimum tax on gross turnover even if it is losing money. This is a huge load on farms that are already struggling, particularly when the price of feed and energy is high.
3. Disillusionment With Import and Machinery Taxes
   • The farms are uncertain as to whether machinery (such as waterers, feeders, and climate control units) belong under agricultural or industrial taxes, thus causing delays, extra customs duties, or surprise taxes.
4. Unequal Enforcement:
   • While organized poultry companies are constantly monitored, small farmers in rural areas frequently operate outside of the official tax system, creating an unfair playing field.

Impact in Real Life

Numbers aren’t the only factor here. For thousands of poultry farmers, it’s a matter of survival. Here are some real-world effects of tax policies on the industry:

• Small Farms Are Going Out of Business
  • Many small and medium-sized poultry farms are having difficulty breaking even as a result of tax-driven increases in input costs. Some are opting to completely shut down.
• Eggs and Chicken Prices Are on the Rise
  • Market prices go up when taxes increase the cost of feed and fuel. This means that proper nutrition is more expensive for ordinary consumers, especially those belonging to poorer families.
• Export Potential Is Being Wasted
  • Pakistan can export processed chicken and eggs to the Middle East, Central Asia, and even Africa. However, this potential is still unrealized because of tax complications and a lack of sectoral incentives.

From Business Insecurity to Food Security

The irony is painful: inconsistent tax enforcement and a lack of policy support are starving the nation’s very industry. There’s a huge disconnect between tax authorities and agriculture policymakers. While one side sees poultry as an essential commodity that should be supported, the other treats it like a fully commercial venture ripe for taxation.

What Can Be Done?

To protect this vital industry and the people it serves, the following is desperately needed:

• Restoring tax exemptions on essential poultry inputs like vitamins, vaccines, and feed ingredients; lowering or eliminating the minimum turnover tax for registered poultry farms, especially those with incomes below a certain threshold.
• Promote exports by providing tax incentives and expedite processing of processed poultry products.
• Create a special tax status with specific regulations for poultry under agribusiness versus industry.
• Make it convenient for farmers to do so without hiring permanent accountants by decentralizing and digitizing taxation and registration in poultry farms.

Conclusion: The Hand That Provides for Us Should Not Be Taxed

In Pakistan, the poultry sector functions as a national safety net in addition to a commercial enterprise. From the middle-class family trying to buy cheap chicken at the local market to the village farmer, everyone in society will suffer if it is taxed into oblivion or muddled into nonexistence.

Just fair taxes, transparent policies, and rational incentives are needed for this booming sector to grow and develop as well as for Pakistan to be able to feed itself in a secure and sustainable manner. We cannot tax the hand that feeds us.