In the next budget, the Pakistani government is considering reducing the pharmaceutical industry’s sales tax distortion (2022-23).
One of the suggestions under discussion, according to sources, is to lower the sales tax rate or abolish the previous government’s 17 percent general sales tax on raw materials used in the manufacture of finished products, such as medications. It’s possible that the zero-rated local supply will persist.
The pharmaceutical sector has requested a zero-rated sales tax reduction from 17 percent to 5% on pharma raw materials, with the Federal Board of Revenue (FBR) having the authority to levy a 5% sales tax on completed items.
In light of suggestions made by the Pakistan Pharmaceuticals Manufacturing Association, the FBR’s “Issues Resolution Committee” has decided to settle sales tax refunds related to issues of pharmaceutical businesses during the budget (2022-23). (PPMA).
The “Issues Resolution Committee” chaired by Chief Commissioner-IR, LTO, Karachi, and made up of senior FBR personnel, is responsible for resolving pharmaceutical company issues.
The Pakistan Pharmaceutical Manufacturers’ Association (PPMA) has notified Prime Minister Shehbaz Sharif that the previous government’s decision to levy a 17 percent sales tax on raw materials used by medication manufacturers had jeopardized the country’s capacity to get crucial pharmaceuticals.
The country’s drug manufacturers had been lobbying on this one topic for the last four months, but the previous administration refused to budge and stuck to its unfair judgment.
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