A strike by Pakistani flour millers over a government-imposed tax entered its second day on Friday, raising concerns about flour shortages in parts of the South Asian country.
On Thursday, hundreds of mills across Pakistan went on strike following a call by the Pakistan Flour Mills Association (PFMA), which represents over 900 mills. The strike was in response to a new 5.5 percent withholding tax on flour mill sales introduced in the federal budget for fiscal year 2024-25, effective from July 1.
The PFMA stated that the government has also mandated flour mills to collect an additional 2.5 percent withholding tax on essential commodities sold to retailers (non-filers) and 2 percent from wholesalers (non-filers). Moreover, millers are now required to collect a 0.5 percent withholding tax on flour sales from retailers (filers) and 0.10 percent from wholesalers (filers).
“We are observing a nationwide strike against the government for imposing taxes and turning flour millers into tax collection agents,” said Javed Yusuf, a former PFMA chairperson. “Our strike will continue until the government withdraws all taxes imposed in the budget.”
Yusuf mentioned that around 1,600 flour mills, employing approximately 4,000 workers, have shut down across Pakistan: “We cannot collect taxes on behalf of the FBR; it’s not our job,” he added.
The strike comes as Pakistan navigates a challenging economic recovery amid double-digit inflation and a deepening macroeconomic crisis. The country has been seeking foreign investment and a bailout from the IMF to stabilize its fragile $350 billion economy.
The tax-laden budget, with a tax revenue target of Rs13 trillion ($46.66 billion) for the current fiscal year—up about 40 percent from the previous year—has been rejected by nearly all major trade bodies and opposition parties. Pakistan’s government has taken these unpopular measures amid negotiations with the IMF, which has conditioned a fresh loan program on tax reforms and increased revenue.
According to the PFMA, there are 1,725 flour mills in Pakistan, and the daily national flour consumption is around 45,000 tons. The ongoing strike has already halted flour supply to grocery stores across Punjab, the country’s most populous province, with market stocks expected to last only one week.
