No relief for babies: Heavy tax on formula milk

The budget for 2024-25 was unveiled this Wednesday, on June 12, by Finance Minister Muhammad Aurangzeb.

As the government depends on the International Monetary Fund’s (IMF) bailout package, citizens were further burdened with heavy taxes as per the administration’s commitments to the lender. Milk products for infants, a necessary item for many families, will now carry an 18 per cent tax.

But why is this issue noteworthy?

On January 21, 2022, the Finance (Supplementary) Bill—a ‘mini budget’—was passed by the National Assembly following extensive debate over the proposed taxes by the Pakistan Tehreek Pakistan (PTI) government. Among the contentious proposals was a 17 per cent sales tax on locally produced infant formula milk, classified as a “luxury product.”

This classification sparked heavy criticism from both the public and the opposition, who argued that labelling a basic necessity for children as a luxury was unjust. In response, the-then Finance Minister Shaukat Tarin promised to push for the exclusion of children’s milk products from the Bill.

However, two years later, heavy taxes are being imposed on infant milk products once again.

According to Statista, a German data-centric platform, the Baby Milk & Infant Formula Market in Pakistan is projected to grow by 0.76 per cent from 2024 to 2029. This trend indicates increasing reliance on infant milk products due to various reasons.

Traditionally, in South Asian countries like Pakistan, reliance on infant milk products is frowned upon, with a cultural preference for breastfeeding. However, several factors can make breastfeeding unfeasible.

Certain health conditions, such as infections or breast surgeries, can prevent mothers from breastfeeding. Additionally, some mothers can not produce enough milk due to lactation insufficiency. In other cases, babies are born with conditions like galactosemia, which prevents them from digesting breast milk. Furthermore, specific nutritional deficiencies can not be addressed by breast milk alone and require formula milk supplementation.

Moreover, not every mother is comfortable with breastfeeding, and many prefer to use formula milk to feed their children. Working mothers, in particular, may not have the flexibility to breastfeed and thus rely on formula milk.