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PBF for tax exemption for cold storages manufacturing sector

Written by The Frontier Post

LAHORE (APP): Pakistan Businesses Forum (PBF) has urged the federal government to exempt cold storages manufacturing sector from taxes including GST (general sales tax) for next ten years to ensure food security and increase perishable exports.

Talking to APP here Sunday, PBF Vice President Ahmad Jawad said that similarly in the operational mode, five years tax holiday should be granted to respective firms.

He was of the view that food prices were fluctuating frequently due to high inflation and this was basically because Pakistan did not have proper food storage facilities, and seasonal demands put a strain on supplies, resulting in ever-rising food prices.

In Pakistan, he said, cold storages were filled only with potatoes and apples most of the time. However there is no food processing industry to increase storage life. “This is needed not only to reduce food losses which are significant in Pakistan but also help farmers get better incentives and income, better document the value chain, increase credit to farm economies and help achieve overall competitiveness in the country’s rural sector,” said Jawad.

To a question, the PBF Vice President said government should increase number food processing industries as processed food could be stored for a long period, and in this regard viable incentive policy should also be announced. “Tomatoes and onions can be converted into paste, wheat into biscuits, fruit into juices and concentrates, etc. Similarly mangoes and kinnow can be stored for about three and half months, cherries for 45 days, kiwifruit for six months, apples for three to six months, and bayberries for about 30 days. Eggs consumption increases in winter so increases its prices, and if there is an egg powder processing unit in place, then during low demand period (in summer), eggs can be converted into powder, which factories and bakeries can stock for later use.”

He added that the extension of storage period also brings higher added value. Fruit with higher added value, such as cherries, kiwifruit and golden pears, could be sold at higher prices when stored off-season.

To a query, he explained that after picking, fruit could not be directly put into the cold storage warehouse, they must be precooled at 0-5°C. “When the fruits are picked, they have residual heat, and if these are immediately taken to a cold storage warehouse, the surface temperature drops, but the central temperature does not, this may lead to spoilage in fruits,” he said, citing that some apples in the supermarket look good from the outside but rotten inside, because these were not precooled properly.

Jawad suggested the government must focus on this sector and take appropriate and comprehensive measures in this regard because it could enhance country’s horticulture exports tenfold.

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