Pet food import taxes in Pakistan double in a year

Pakistan’s Federal Board of Revenue (FBR) has imposed a 50% regulatory tax on the import of cat and dog food as part of the Finance Bill 2024, which was presented in the country’s National Assembly last month.

Officials are levying import duties on 657 luxury and non-essential retail items, including pet food, until 30 June 2025. The government also includes other products such as tobacco, apparel, sugar confectionery, perfumes, watches, leather products, cars and dairy products in the luxury category.

This is the second time that pet food import taxes have been increased. Last year, the category saw a hike from 17% to 25%.

Opportunities for local manufacturers?

As many as 90% of pet parents in Pakistan depend on imported pet food, while 10% consume locally manufactured products.

“The increased regulatory duty/tax has made imported pet food products more expensive, eventually making them well out of reach in terms of availability and pricing,” Rafae Dossal, CEO of pet food brand Waggles Pet Foods, tells GlobalPETS.

According to Dossal, the imposed tax duties enable manufacturers like Waggles to “improve their market presence and work alongside retailers and distributors to capture a larger share of the market.”

Increasing pressures

The import duties are intended to improve the South Asian country’s trade balance by reducing dependency on foreign imports. The measure is part of the International Monetary Fund’s (IMF) strategy to help the country combat inflation.

However, local media warns that the increased customs duty will increase domestic inflation and affect exports due to widespread corruption.

“Where the country struggles to honor its debt payments, it massively falls on the consumers to choose whether to consume imported products or opt for good quality local products,” notes the CEO of Waggles.

Khawaja Asif, Pakistan’s Federal Minister, has reportedly raised “serious objections” to the increase in taxes and duties.