Pakistan: Tax Hike Sends Milk Prices Soaring, Exceeding Costs in Paris and Amsterdam

Milk prices in cash-strapped Pakistan have increased by more than 20% following the imposition of a new tax, making the staple more expensive than in major global cities like Paris, Melbourne, and Amsterdam.

According to Bloomberg data, ultra-high temperature (UHT) milk now costs 370 rupees ($1.33) per litre in Karachi supermarkets, compared to $1.23 in Paris, $1.08 in Melbourne, and $1.29 in Amsterdam. The recent 18% tax, part of new fiscal measures approved in the national budget, has sharply driven up milk prices, which were previously exempt from taxation, The Express Tribune newspaper reported.

Muhammad Nasir, spokesperson for the local branch of Dutch dairy giant Royal FrieslandCampina NV, noted that before the tax hike, milk prices in Pakistan were on par with those in developing nations like Vietnam and Nigeria. As a result of the tax, retail prices have surged by up to 25%.

Pakistans on social media platforms were displeased with the price hike. “Bone-breaking inflation is on its peak! Milk prices in Pakistan have surged by more than 20% following the imposition of a new tax, making the dairy staple more expensive in Karachi than in Paris, Melbourne, and Amsterdam,” said one of the users on X.

“Milk prices in Pakistan surged by more than a fifth after a new tax was applied, making the dairy staple more expensive than in France, Australia and some other developed nations. Great going,” wrote another with an angry emoji.

The rise in milk costs is expected to worsen inflation in Pakistan, where wages have stagnated and purchasing power is declining. The latest budget, which saw taxes climb by a record 40%, aims to meet conditions set by the International Monetary Fund (IMF) for a new financial rescue package.