Flour Mills Strike Over Withholding Tax Raises Fears of Flour Crisis

Several cities across the country are bracing for a potential flour crisis as flour mills have halted wheat grinding and flour supply starting today (Thursday). The strike is in response to a newly imposed withholding tax, prompting concerns about a shortage of this staple food.

In the budget for 2024-25, the government introduced a withholding tax of up to 5.5% on various stages of the staple food supply chain, according to leaders of the flour mills association. This tax increase is expected to raise the cost of flour significantly.

Pakistan Flour Mills Association (PFMA) Central Senior Vice Chairman highlighted that authorities have also mandated mills to collect an additional 2.5% and 2% withholding tax on flour sales from non-filer retailers and wholesalers, respectively.

PFMA Chairman Asim Raza stated that around 1,500 flour mill owners have joined the strike, emphasizing that the mills cannot bear the burden of collecting the withholding tax, which would increase the price of flour by Rs200.

As a result of the PFMA’s strike announcement, flour mills in several regions have ceased operations. In Gujranwala district alone, 73 mills have shut down completely. The situation is similar in the Multan Division, where all 100 mills, including 60 in Multan, have closed their doors.

The strike by flour mills is already causing widespread concern, with fears of a looming flour shortage impacting consumers nationwide