Home Business Sales tax on pharmaceuticals lowered from 17% to 1%

Sales tax on pharmaceuticals lowered from 17% to 1%

The tax will be lifted on July 1, and companies can open new letters of credit (LC)

sales tax
The Department of National Health Services (NHS) requested on Monday that Prime Minister Shehbaz Sharif decrease the sales tax on domestically manufactured pharmaceuticals.

At a press conference, Pakistan Pharmaceutical Manufacturers Association (PPMA) Chairman Qazi Mansoor Dilawar said that the sales tax on 17 articles had been decreased to 1% and congratulated the government for the gesture.

He said, “A sales tax of 1% is levied on raw materials and finished goods. The tax will lift on July 1, and companies can open new letters of credit (LC)”.

In speaking to the media, NHS Minister Abdul Qadir Patel said the previous government imposed a 17 percent sales tax on medicines because of a drop in medicine production and fears of a shortage of life-saving medication.

According to the minister, the PTI government’s 17 percent sales tax has reduced the manufacture of pharmaceuticals.

Moreover, according to the minister, the measure would benefit a number of factories that are on the edge of closing.

The situation compounded by a threefold increase in raw material costs. A massive increase in freight charges, a jump in electricity tariffs as well as gasoline rates. And a depreciation of the rupee.

The PPMA president disproved the notion that the industry was reaping windfall profits. Claiming that many medications cost more than the retail price. And that 70% of drugs in Pakistan were cheaper than in India and Bangladesh.

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