Flour mills in various cities across the country have halted wheat grinding and flour distribution starting today (Thursday), sparking concerns of a potential flour crisis due to a strike against newly imposed withholding taxes.
In the 2024-25 budget, the government introduced withholding taxes of up to 5.5% at different stages of the staple food supply chain, according to leaders of the Flour Mills Association. This measure has increased the cost of flour, prompting the strike.
The Pakistan Flour Mills Association (PFMA) Central Senior Vice Chairman explained that mills were also instructed to collect additional withholding taxes of 2.5% from non-filer retailers and 2% from wholesalers on flour sales.
PFMA Chairman Asim Raza emphasized that mills would not assume the role of tax collectors, citing a Rs200 increase in flour prices due to the withholding tax.
The PFMA reported that approximately 1,725 flour mills nationwide have ceased operations, including 1,100 in Punjab, 300 in Khyber Pakhtunkhwa, over 300 in Sindh, and 25 in Balochistan. This has significantly disrupted flour production and supply, particularly affecting regions like Gujranwala, Multan, Faisalabad, Kamalia, Khushab, Peshawar, and Quetta.
Chairman (South Zone) Aamir Abdullah of PFMA stated that Sindh’s flour mills have also stopped operations in protest against the withholding tax.
The association warned of potential flour shortages if the impasse between the government and the association continues unresolved, highlighting the immediate impact on the production of 5kg, 10kg, and 20kg flour bags.
Earlier, flour mill owners had attempted negotiations with the government, but talks failed to address their demands, leading to the announcement of the strike.
