Written by Mrs. Anjum Shahnawaz Islamabad, May 3, 2026 – Federal Minister for National Food Security and Research Rana Tanveer Hussain has emphasized the need for dairy sector tax reforms in Pakistan, calling for rationalized taxation and structural changes to improve affordability, ensure safe nutrition, and support farmers. He made these remarks during a pre-budget 2026-27 consultation jointly organized by the Sustainable Development Policy Institute and the Pakistan Dairy Association, according to a press release issued on Sunday. Focus on Tax Relief and Sector Growth The minister noted that livestock contributes nearly 60 percent to Pakistan’s agriculture sector and holds strong potential for improving domestic nutrition and boosting exports. He acknowledged that existing taxation policies, particularly General Sales Tax (GST) on dairy products, have negatively impacted production and sectoral growth. “Softening of the tax regime can help increase both production and revenue,” he said, adding that reducing GST on milk is feasible. He also revealed that pilot projects for pasteurization and the development of “safe milk cities” are under consideration to enhance quality and formalize the sector. Concerns Over Informal Economy In his welcome remarks, Dr Abid Qaiyum Suleri, Executive Director of SDPI, proposed multiple taxation scenarios and suggested placing processed milk in a third schedule. He warned that rural milk collection centres were shutting down, as pricing policies for processed milk were impacting loose milk markets. Meanwhile, Usman Zaheer Ahmad, Chairman of the Pakistan Dairy Association, highlighted that nearly 40 percent of children in Pakistan suffer from stunting due to malnutrition, despite milk being widely consumed. He noted that around 98 percent of the dairy sector remains informal, with limited quality control mechanisms. He further revealed that the imposition of 18 percent GST in 2024 led to a 27 percent decline in the formal dairy sector. He proposed reducing GST to 10 percent and integrating parts of the informal economy into the tax net, potentially generating up to Rs250 billion in revenue. Nutrition and Public…