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ISLAMABAD: Hundreds of flour mills across the country will resume “normal” operations from today, Sunday, after postponing their nationwide strike over the imposition of withholding tax till July 22, state broadcaster Radio Pakistan said, easing fears of a shortage of the commodity. 

Hundreds of mills across Pakistan went on strike on Thursday on the Pakistan Flour Mills Association’s (PFMA) call which represents over 900 mills, against a new 5.5 percent withholding tax imposed on the sales of flour mills in the federal budget for the fiscal year 2024-25, which came into effect on July 1.

The PFMA says the government has also directed flour mills to collect another 2.5 percent withholding tax on the sale of essential commodities to retailers (non-filers) and 2 percent from wholesalers (non-filers). The association says millers also now have to collect 0.5 percent withholding tax on the sale of flour from retailers (filers) and 0.10 percent tax from wholesalers (filers).

A PFMA delegation met a high-level government committee formed by Prime Minister Shehbaz Sharif on Saturday to discuss the strike, following which the PFMA announced postponing their strike till July 22. 

“The flour milling industry will resume normal operations nationwide from tomorrow (Sunday) and ensure the supply of wheat products to the market,” Radio Pakistan reported on Saturday. 

The PFMA delegation apprised the committee about the ongoing strike, the imposition of withholding tax, and its repercussions on the industry and the public, Radio Pakistan said. Meanwhile the government committee included Minister of State for Finance Ali Pervaiz, Economic Affairs Minister Ahad Cheema, Law Minister Azam Nazeer Tarar and Federal Board of Revenue (FBR) Chairman Amjad Zubair Tiwana. 

“The committee listened to their concerns and assured them of achieving a positive resolution by 22nd of this month,” the state broadcaster said. 
The strike takes place as Pakistan navigates a tricky path to economic recovery amid double-digit inflation and a deepening macroeconomic crisis. The South Asian country has been scrambling to secure foreign investment from friendly nations in a bid to keep its fragile $350 billion economy afloat.
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 one, has been rejected by almost all major trade bodies and opposition parties. Pakistan’s government has taken unpopular measures amid negotiations with the IMF, which has made tax reforms and increasing revenue a major precondition for a fresh loan program.

There are 1,725 flour mills in Pakistan and the daily national flour consumption stands at around 45,000 tons, according to the PFMA.

The strike this week halted flour supply to grocery stores across Punjab, the country’s most populous province, while market stocks were expected to last only one week.