Tea Prices Set to Surge by up to Rs. 300 Per Kg

The Pakistan Tea Association (PTA) has warned that the Federal Board of Revenue’s (FBR) new minimum retail price (MRP) of Rs. 1,200 per kg on imported tea could drive up tea prices by Rs. 150-300 per kg. Chairman Mohammad Altaf cautioned that this price hike may lead to an increase in tea smuggling. The association said the MRP fails to account for the global tea prices which range from $0.50 to over $3 per kg based on type and quality. Also, bulk tea imports complicate the standard pricing model imposed by FBR. As tea remains an essential and affordable staple for millions of Pakistanis across socio-economic levels, the chairman said higher prices might push consumers toward low-quality, smuggled tea. He noted that an 18 percent general sales tax already applies to imported tea, and any additional tax burdens could further strain consumers. The association has called for imported tea to be classified as “raw material” under the Sales Tax Act of 1990 for blending, mixing, or packaging, with sales tax applied to the import value rather than a fixed retail price. The chairman added that the fixed MRP could disrupt the domestic supply chain and limit commercial imports entirely.