KARACHI: Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Wednesday said tea has become a necessity; therefore, taxes on this item should be reduced in the upcoming budget.

“Tea is also used by the poor with roti as meals, as increasing inflation has eroded their buying power, he said. Tea should be declared a food item to provide relief to the masses facing high food prices,” he said while talking to the business community. The veteran business leader said that local production should be increased to save foreign exchange and bring the prices down.

He said that tea consumption and its import was increasing while smuggling continues despite a reduction in it. Pakistan consumes almost two hundred thousand tonnes of tea annually but it is attracting 53 percent direct and indirect taxes which is not justified.

He said that the tax structure should be improved and five percent withholding tax should be reduced to two percent across the country as some elements in erstwhile FATA, PATA, and AJK are misusing zero tax regime distorting the market. Uniform taxation will promote documentation, improve revenue, provide a level playing field and develop this sector, he said.

He said that tea imports had increased by 25 percent during the first nine months of the current fiscal from $376 million to 435 million dollars. Some credit for increased imports goes to the FBR which has reduced the smuggling of tea but it should be totally stopped.

He said that Pakistan should learn from the experience of China which is on its way to becoming the largest producer surpassing Kenya, the largest tea exporter. He noted that tea consumption is increasing by 2.2 percent annually and total production will be 4.4 million tonnes by 2027.