Pharmas fear added sales tax to hit drug production

ISLAMABAD: Pharma majors on Friday asked the government to review imposition of 17 percent general sales tax (GST) on medicine raw materials, saying that the added tax would lead to shortage of essential drugs in local markets.

“GST should be levied at the stage of the purchase and not at the time of consumption of raw material for streamlining the taxation process,” said Pakistan Pharmaceutical Manufacturers’ Association (PPMA)

The demand was made in an emergency general body meeting of PPMA chaired by its central chairman Qazi Mansoor Dilawar. Drug manufacturers from Islamabad, Lahore, and Karachi, attended the meeting via video-link facility.

The meeting decided to form a nine-member committee under the PPMA chairman to run a campaign using the media to keep the masses informed about effects of the added sales tax on drug manufacturers.

PPMA chairman mentioned the pharmaceutical industry duly fulfilled up to 85 per cent needs of medicines required to treat patients in the country, adding that the industry exported medicines to 52 different countries and marked the international standard after ‘much hard work’.

“The present status and international recognition gained by the medicine industry of Pakistan can be ruined if it has to comply with the regime of GST all of a sudden.”

He added that prices of locally produced medicines were relatively lower than the drug prices in other regional countries.

Participants of the meeting suggested that, as the last resort, government should charge the GST from the end-consumers of the medicines in the country as sales tax was basically a consumer tax, they said. They recommended to the government that GST should be levied at the stage of the purchase and not at the time of consumption of raw material for streamlining the taxation process.

Other members of the committee included Arshad Mehmood, Usman Shaukat, Dr Sheikh Kaiser Waheed, Zahid Saeed, Ehsan Naseer Awan, Dr Faisal Q Khokkar, Asad Shuja ur Rehman, and Khalid Misbah Ur Rehman. Over 100 PPMA members attended the meeting including FPCCI acting president Khawaja Shahzeb Akram.