In a bid to bridge a budgetary gap, the federal government has introduced Rs. 36 billion in new tax measures—one of the most controversial being a Rs. 10 federal excise duty (FED) on day-old chicks. This move has raised alarms within the poultry industry, which fears a ripple effect on production costs and retail chicken prices.

The decision comes in the wake of a revised fiscal strategy following the government’s unexpected 10% hike in public sector salaries—up from the initially proposed 6%—and a reduction in the import tax on solar panels from 18% to 10%. These adjustments created a shortfall in the budgetary framework agreed upon with the International Monetary Fund (IMF).

To address the gap, the Federal Board of Revenue (FBR) submitted six proposals to the IMF, of which three were approved. Alongside the FED on chicks, the approved measures include:

• A 29% tax on profits earned by corporate entities through mutual funds
• A 20% tax on income from government securities

Industry stakeholders argue that taxing day-old chicks will increase the cost of poultry production, ultimately burdening consumers with higher prices for chicken and eggs. The poultry sector, already grappling with inflation and feed costs, views this as a setback to affordability and food security.