Pakistan Dairy Association Meets Federal Minister to Highlight Impact of 18% Sales Tax on Packaged Milk and the Need for Formalization of the Sector

Islamabad – April 18, 2025 — A high-level delegation of the Pakistan Dairy Association (PDA) met with the Federal Minister for Planning, Development & Special Initiatives, Professor Ahsan Iqbal, to discuss the current challenges specifically after the imposition of 18% sales tax on packaged milk facing the dairy industry and the need for sustainable reforms to unlock its full potential.
The delegation included Kashan Hasan, Managing Director FrieslandCampina Engro Pakistan and Vice Chairman of PDA; Dr. Shehzad Amin, CEO PDA; Dr. Muhammad Nasir from FCEPL; Aatekah Mir from Nestlé Pakistan and Noor Aftab from Tetra Pak. During the meeting, the PDA presented it’s position on the impact of the unprecedented 18% sales tax on packaged milk, and its ripple effects on farmers, consumers, and the formal dairy value chain.
The PDA emphasized that this tax has not only made safe and nutritious packaged milk unaffordable for millions of households, but also triggered a decline in milk procurement from farmers by nearly 20%, leading to widespread disruptions across the sector. With over 40,000 farmers displaced and 500+ milk collection centers shut down, the Association reiterated that the current tax policy undermines formalization, weakens investment in safety and quality, and erodes public trust in the sector.
In response, Minister Ahsan Iqbal expressed his full support for the Association’s position,acknowledging the adverse effects of the current taxation regime. He affirmed the importance of dairy as a key pillar of food security, economic growth, and export potential, and endorsed the need for a long-term dairy policy to ensure sectoral resilience, consumer health, and farmer sustainability.
He encouraged the PDA to collaborate with his Ministry to co-develop a roadmap for dairy formalization and growth. Specifically, he highlighted the School Milk Program as a strategic intervention to improve  child nutrition, school attendance, and cognitive development, while simultaneously generating demand for safe, nutritious milk.
Minister Iqbal emphasized the Ministry’s commitment to working closely with PDA on dairy sector reforms, including the development of the milk value chain, and long-tern sustainable policies that enable rather than hinder progress. He noted, “With the right incentives, Pakistan’s dairy sector can be put on path to formalization, thereby leading to improved nutrition, and export competitiveness.” The Pakistan Dairy Association welcomed the Minister’s strong endorsement and reiterated its commitment to supporting the Government in shaping inclusive, data-driven policy solutions, inline with global best practices that benefit consumers, farmers, industry, and the national economy.