Ahmed Khan Malik

The Sindh Investment Department has chalked out a plan to attract investment in the pharmaceutical sector through various tax and fiscal measures.

Officials at the investment department told WealthPK that under the plan, financial institutions will provide long-term local currency finance for imported and locally-manufactured new plants and machinery for export-oriented projects.

“The facility will be available to the export-oriented projects with at least 50% of their sales constituting exports or their annual exports being equivalent to $5 million, whichever is lower,” Zubair Shahab, the investment department’s additional director said, and added that only new plant, machinery and equipment to be used by the export-oriented projects in the pharmaceutical sector under developmental category shall be eligible for financing under the facility.

He said that financing would be available to the extent of the C&F (cost and freight) value of the imported new plant and machinery and ex-factory price of the new locally manufactured machinery. Shahab said the limit for expenditure incurred by pharmaceutical companies on sales promotion, advertisement and publicity allowable as a deduction against their business income had been increased from 5% to 10% of the turnover as per the Drug Act. 

He said that Federal Board of Revenue also reviewed sales promotional spending by the pharmaceutical companies from time to time. “The finance executive should regularly monitor promotional spending to ensure that it remains within the defined limits.” Shahab said that investment department would assist companies and investors intending to invest as well as facilitate the implementation and operation of their projects. 

“The wide range of services provided by the department includes providing information on the opportunities for investment and facilitating companies that are looking for joint venture partners,” he said.  He said that the provincial government had also put in place an alternate dispute resolution mechanism to facilitate the investors under various commercial, industrial labour and taxation laws. Sindh has a vibrant and forward-looking pharma sector. The domestic pharma market, in terms of market share, is almost evenly divided between the nationals and multinationals.

The pharma industry has experienced progressive growth over the years, particularly over the last decade. The industry has invested substantially to upgrade itself in the last few years. It is following Good Manufacturing Practices (GMP) in accordance with the domestic as well as international standards. Currently, the industry has the capacity to manufacture a variety of products ranging from simple pills to sophisticated biotech, oncology and value-added generic compounds.

Credit: INP-WealthPk