The pharmaceutical industry has demanded exemption from the three percent value-added sales tax (VAT) imposed on imports of manufactured drugs. The caretaker government has sought the opinion of the Federal Board of Revenue (FBR) and the Drug Regulatory Authority of Pakistan (DRAP) on the exemption of the minimum three percent VAT levied on the import of manufactured drugs, pharmaceutical, and biological products. According to media reports, the Pakistan Chemists and Druggists Association has written a letter to Caretaker Prime Minister Anwarul Haq Kakar stating that a three percent VAT is applicable on manufactured drugs at the import level.

A pricing regime for pharmaceutical and biological products is in force in Pakistan, and the prices of medicines cannot be fixed beyond the fixed price limit. The three percent VAT paid on imported pharmaceutical and biological products cannot be passed on to the consumers, due to which the entire burden has to be borne by the pharmaceutical industry. The industry has requested the government to exempt imported pharmaceutical and biological products from the three percent VAT.

Credit: Independent News Pakistan (INP)