E-drug: Pakistan: Sales Tax on Medicines (cont)
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Dear friends,
Info on GST on medicines: urgent responses are requested
On 21st March 2002 Government of Pakistan, through amending the Sales
Tax Act 1990, imposed 15% across the board General Sales Tax (GST or
VAT) on all kinds of medicines. Previously the govt. had exempted the
medicines from GST. This imposition, in the backdrop of already high
drug prices which has seen recently up to 40% increase, has resulted in
a public outcry.
We consider this as a misplaced and insensitive public policy. A
government which cannot provide basic health care service to more than
30% of the population - that too marred by urban bias, now want to make
it almost impossible for the poor patients to buy medicines from their
shallow pockets. With relative inelastic demand and pervasive poverty,
one can imagine the plight of the sick poor. Paksitan has 40% of its
population living below the poverty line. We think this is a "taxing the
poor" policy.
Our organization, The Network for Consumer Protection in Pakistan, has
decided to advocate for a favourable review of this policy and in this
connection we have organized a nation wide campaign. Among many
activities we have planned, we are also trying to put together a briefing
paper on the issue of GST in which we want to draw upon the policies and
experiences of other developing and developed countries. We have some
idea that many countries categorically exempt medicines along with
other essential items like food items, children clothing etc. from GST.
As an argument and for our briefing paper we want to get this
information from various countries. Also if people know of any reliable
sources of information in this connection - published articles, websites
etc - please let me know as early as possible.
At some point in our campaign, and after the publication of our briefing
paper, I would get back to you with our experience, which might be
useful for others in other settings.
I keenly look forward to hear from you.
Regards
Dr. Zafar Mirza
The Network for Consumer Protection in Pakistan
Executive Coordinator
Islamabad;;44000;Pakistan
Dr. Zafar Mirza <netcp@apollo.net.pk>
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