Winter tea prices set to skyrocket as FBR tightens tax policies

Islamabad: With winter setting in, tea—an essential comfort for many—is likely to become an expensive indulgence as the Federal Board of Revenue (FBR) moves to set a minimum retail price of 1,200 rupees per kilogram. This decision is part of a broader strategy to increase tax revenues, but it could put tea out of reach for the average consumer.

Tea importers have expressed serious concerns, predicting that this move will lead to an unprecedented price hike and possibly fuel an increase in smuggling. Traders warn that consumers nationwide will be directly impacted by this steep rise in tea prices.

Mohammad Altaf, Chairman of the Pakistan Tea Association, noted that the FBR’s decision overlooks fluctuations in global tea prices. He highlighted that imported tea is already subject to an 18% general sales tax, and the addition of further tax requirements could create new challenges.

Altaf argued that imported tea should be considered a raw material, noting that prices vary widely based on brand, quality, and packaging. Currently, most consumers buy tea in the range of 700 to 950 rupees per kilogram. Enforcing a uniform minimum retail price, he added, could also disrupt the supply chain.

As the FBR prepares to implement this policy, tea industry stakeholders are urging the government to consider the impact on consumers and address concerns to prevent supply chain disruptions and potential smuggling.