ISLAMABAD, April 13, 2026 – Pakistan’s Federal Minister for Commerce Jam Kamal Khan on Monday directed industry stakeholders to submit proposals for reducing the general sales tax (GST) on dairy products from 18% to 10%, in a move aimed at supporting the country’s struggling dairy sector.
The directive came during a meeting chaired by the minister with a delegation of the Pakistan Dairy Association, led by its Chief Executive Officer Dr. Shehzad Amin. The session was also attended virtually by Rana Ihsaan Afzal, along with senior officials from the Ministry of Commerce.
Discussions focused on key challenges facing the dairy industry, including high taxation, tariff-related constraints, low productivity and the need for structural reforms to formalize the largely undocumented sector.
Industry representatives highlighted that the current GST rate of 18% on dairy products is significantly higher compared to many countries, where such essential food items are either exempt from tax or subject to minimal levies. They argued that the high tax burden discourages formalization and limits growth potential.
In response, Jam Kamal Khan asked the association to prepare a comprehensive proposal outlining a reduction in GST to 10%, with Rana Ihsaan Afzal tasked to coordinate closely with stakeholders to finalize recommendations.
The minister emphasized that improving the genetic quality of dairy livestock is critical to enhancing milk yields and overall sector productivity. He noted that without proper breeding strategies and technical guidance, farmers would struggle to achieve sustainable growth.
“Structured support, regulation and farmer education are essential to transform the dairy sector into a modern and efficient industry,” he said.
The association also proposed measures including improved access to financing and banking services for farmers, stricter regulation to ensure the sale of pasteurized and properly packaged milk, and pilot projects in urban centers to transition informal operators into documented businesses.
Additional recommendations included cross-breeding programs and capacity-building initiatives to enhance livestock quality and boost milk production.
Jam Kamal Khan welcomed the proposals and said he would engage provincial governments to ensure coordination for implementation. He added that a comprehensive reform plan would help improve productivity, strengthen regulatory compliance and increase the dairy sector’s contribution to Pakistan’s economy.