No easing of tax burden for Pakistan’s chicken farmers

Hopes for a reduction in tax rates on poultry production in the recent federal budget have been dashed.

No major changes in tax rates for Pakistan’s poultry industry were announced in the new federal budget.

This was despite assurances from the government that the sector would benefit from some future financial relief, reported The Express Tribune recently.

On behalf of its members, the leaders of the Pakistan Poultry Association (PPA), expressed their frustration at the news.

With no changes announced, the 10-rupee (PKR; 3.60-US cent) Federal Excise Duty (FED) on each day-old chick, and 18% tax on sales of processed chicken remain in effect for the federal budget for the 2026-2027 fiscal year.

“The poultry sector is the backbone of Pakistan’s affordable animal protein supply,” said the PPA. “Over the past several months, we remained engaged with policymakers, who repeatedly assured us that these anomalies would be addressed. Unfortunately, the final budget has failed to deliver on those commitments.” 

Industry had called for government support
Prior to the finalization of the Finance Bill for the coming 12 months, the same source reports that the PPA had warned about the adverse effects of taxation on the industry.

Burdensome taxes on the sector hold back investment, and make Pakistan’s chicken exports less competitive, according to the association. Furthermore, it says, they raise consumer prices and represent a threat to the country’s future food security.

PPA says that the tax on processed chicken is a disincentive to invest in modern facilities for the production of safe and value-added products.

Furthermore, it alleges that the FED on day-old chicks is not economically justified, and it adds to costs that are passed on directly to consumers.

Also adding to the price of chicken in Pakistan are long-standing import duties and sales taxes on vital feed components, such as soybean meal, amino acids, vitamins, and minerals. The latter have a disproportionate impact on poultry production costs, as feed accounts for 60-70% of the total cost. 

More on Pakistan’s poultry sector
Annual domestic chicken production amounts to m ore than 2.36 million metric tons (mmt). This includes fresh and chilled chicken meat, according to the statistics arm of the United Nations’ Food and Agriculture Organization, FAOstat, and for 2024, which is the most recent year for which data have been published. Five years previously in 2019, output was close to 1.52mmt.

With output of 10 million chickens per year, Pakistan’s leading chicken producer is Sadiq Brothers, according to  WATT Poultry Top Poultry Companies database for 2024.

Sadiq Brothers is the parent company of Sadiq Poultry and Sadiq Feeds, the source reports. It produces hatching eggs, day-old chicks, chicken meat, table eggs, and feed for poultry and ruminants. Sadiq Poultry’s hatchery is among the largest in Pakistan.

The latest figures from the FAO put Pakistan’s hen egg production at almost 1.19mmt — up from 895,000 metric tons in 2019.