Karachi, Pakistan – June 14, 2024 – The Pakistan Food Association (PFA) extends its warm appreciation for the recent budget presented by the Federal Minister for Finance, highlighting its pivotal role in fostering economic stability and growth in the country.

Mr. Rashid Siddiqui, President of the Pakistan Food Association, lauded the budgetary measures aimed at ensuring that taxes are equitably paid by industrialists and exporters. He emphasized the importance of a fair taxation system to bolster economic prosperity and sustainability.

In particular, Mr. Siddiqui expressed his support for the government’s decision to levy taxes on the real estate sector. He underscored the detrimental impact of a handful of individuals monopolizing the construction industry, thereby impeding industrial and economic progress in Pakistan. By imposing taxes on real estate transactions, the government aims to rectify this imbalance and promote a more inclusive economic landscape.

Addressing the changing dynamics of investment preferences among the new generation, Mr. Siddiqui noted a growing inclination towards property investment over traditional industrial ventures. He emphasized the need for policies that incentivize investment in productive sectors, thereby stimulating industrial growth and job creation.

Furthermore, Mr. Siddiqui commended the government’s initiative to impose taxes on export profits, recognizing it as a prudent step towards broadening the tax base and ensuring fiscal sustainability. Encouraging a culture of responsible tax compliance among exporters is essential for the long-term prosperity of Pakistan’s economy.

As a leading voice in the food industry, the Pakistan Food Association stands in solidarity with the government’s efforts to promote economic resilience and prosperity for all citizens. Mr. Siddiqui reiterated the PFA’s commitment to supporting policies that foster a conducive environment for business growth and development.

 On other side, Mr. Rashid Siddiqui emphasized the critical role of the agri-food processing sector in Pakistan’s economy, accounting for 21% of the country’s GDP.

The agri-food processing sector encompasses primary processing activities of fruits, vegetables, flour, sugar, pulses, and grains. With more than 22 varieties of vegetables produced in Pakistan and approximately 1,400 flour mills operating across the nation, this sector plays a pivotal role in ensuring food security and fostering manufacturing activities.

Despite the Finance Minister, Muhammad Aurangzeb, acknowledging agriculture as the main pillar of Pakistan’s economy, contributing 24% to GDP and 37.4% to employment generation, the budget fails to adequately address the concerns of the agri-food processing sector. President Siddiqui highlighted that this sector holds significant export potential, which is crucial for the country’s economic growth.

Mr. Siddiqui expressed dismay over the government’s decision not to accommodate the agri-food processing sector in the budget by exempting duties or minimizing taxes. He pointed out that while agriculture witnessed growth of over 6% in the past year, the government has set a modest growth target of only 2% for the upcoming year. This disparity raises concerns about the sector’s ability to maintain productivity and meet the nation’s food demands.

Furthermore, Mr. Siddiqui criticized the increase in sales tax rates for various industries, including hotels, restaurants, and imports, which will now be subject to a standard rate of 17%. He emphasized that such measures would adversely impact businesses and hinder economic growth.