E-drug: Pakistan: Sales Tax on Medicines
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[3 messages in one
- Dr Irfan Michael Roy
- Azhar Hussain - 2 messages
(background also provided by Azhar Hussain ) BS]
1. Dear Sir
Recently the government of Pakistan has announced a 15% sales tax on all
prescription and OTC medicines sold. I would like to know what is the
situation in other countries
Thanks
Dr Irfan Michael Roy
Consulting Pharmacist
Pakistan
"Irfan Michael and Debbie Roy" <imderoy@super.net.pk>
2. Drug prices in Pakistan are already very high and with a 15% further
increase in prices it will further squeeze the access of people to
health care. With increasing poverty and soaring drug prices, people's
decreasing access to essential treatment is going to punish them deeper
in the vicious circle of poverty and distress.
3. Prices of medicines are matters of life and death for the ill and the
poor people. Keeping in view the inelasticity of demand, poor buy
medicines even if they have to sell their other belongings.
The Network for Consumer Protection has planned a massive campaign
against governments decision of imposing 15% GST on medicines. We
would like to know situation in different countries regarding GST on
medicines. An immediate response will be highly appreciated .
Azhar Hussain
Project Coordinator Pharmaceuticals
TheNetwork for Consumer Protection
40-A, Ramzan Plaza, G-9 Markaz
Islamabad
Pakistan.
Tel:00-92-51-2261085
Fax:00-92-51-2262495
Azhar Hussain <azhar@thenetwork.org.pk>
[Background]
15 percent GST levied on medicines
(Reported in Daily Dawn 22nd March, 2002)
(copied as fair use)
ISLAMABAD, March 21: The federal government on
Thursday imposed 15 per cent general sales tax(GST) on all drugs -
imported and locally\manufactured/supplied - to fetch an additional
revenue of Rs5 billion.
The levy would be applicable to all kinds of imported medicines as
well as imported and locally produced raw materials for drugs. At the
same time, the import duty on raw materials for manufacturers of
pharmaceutical active ingredients has been slashed from 10 per cent
to 5 per cent. This was made public through an ordinance on Thursday,
which came
into force immediately.
The slapping of GST on medicines was one of the strings attached to
an International Monetary Fund (IMF) tranche of Poverty Reduction and
Growth Facility (PRGF) to be disbursed later.
Riaz Ahmed Malik, Chairman, Central Board of Revenue and Major
General (retd) Muhammad Asghar, Director General Health told a joint
news conference that the fund generated through imposition of sales
tax on pharmaceuticals and drugs will be diverted to the health-care
budget of the government from the next financial year.
As a result, the government hospitals, dispensaries and maternity
homes will benefit from increased allocations of government funds,
they claimed.
The CBR chairman said that the manufacturers of medicines could also
claim input credits for sales tax on ingredients. Mr Riaz disclosed
that the net revenue generated annually from the levy would be around
Rs5 billion.
Justifying the levy, he said there was already a hidden incidence of
up to 4 per cent sales tax in the manufacturing cost of medicines.
The sales tax was already applicable to electricity, gas, packing
material for medicines such as cartons, vials and bottles as well as