The imposition of a sales tax on feed will cause serious damage to the poultry sector and increase the prices of meat and eggs, reports Dawn.

These concerns were stated in a letter sent by the Pakistan Poultry Association (PPA) to the Ministry of Food and Agriculture. The letter said the Federal Board of Revenue (FBR) was planning to impose sales tax on poultry feed under the newly envisaged value added (VAT) act, 2010.

The PPA said the poultry sector consisted of 285 hatcheries, 141 feed mills and more than 25,000 layer, broiler and breeding farms, and it was a labour-intensive industry employing thousands of people.

Commercial poultry production has bridged the gap between supply and demand of animal protein, it said. "Poultry products have kept a check on the prices of mutton and meat," the PPA said, adding that that poultry production was an important part of agro industry and played its role in food security.

PPA chairman, Dr Muhammad Aslam ,said the feed constituted between 60 to 70 per cent of the total cost of production of chickens and eggs. He said earlier the government had not imposed sales tax on the poultry feed to keep the prices of chicken meat and eggs at competitive level.

According to Dawn, poultry feed includes 55 to 60 per cent grains like maize, sorghum and barley and these grains constitute approximately 50 per cent of the cost of poultry feed.