Islamabad, January 20, 2022 (PPI-OT):The medicine manufacturers in the country have demanded the government to immediately review its latest fiscal move to impose a 17 per cent General Sales Tax on the raw materials of the pharmaceutical industry to avoid a shortage of essential drugs in the country. The representatives of the pharmaceutical industry made the demand to this effect as the regional office of the Federation of Pakistan Chambers of Commerce and Industry hosted a meeting to discuss the situation after the imposition of the GST on the raw materials used by the medicine manufacturing units, according to a statement issued on Thursday.

The leading drug manufacturers who attended the session said the sudden imposition of 17 per cent GCT on the raw materials for medicines would create serious cash flow problems in the pharmaceutical industry. The resultant situation could disrupt the smooth production of medicines in the country, said the members of the Pakistan Pharmaceutical Manufacturers’ Association (PPMA) who were present on the occasion.

Former PPMA Chairman, Hamid Raza, said the GCT imposition would be a serious problem for the medium-sized drug companies that didn’t have much ability to handle sales tax issues. He said that there were several small drug manufacturers in the country, which weren’t registered with the GST system. He advised the government to impose GST on the procurement side instead of consumption for the uninterrupted working of the medicine industry. He said the GST was likely to create serious financial problems for the drug manufacturers as the sales tax refund remained pending for several years.

Former PPMA Chairman, Dr Kaiser Waheed, said that managers who were associated with the pharmaceutical industry definitely required time to learn the system of sales tax as they didn’t have any prior experience of the GST regime. He said the representative of the drug manufacturers who had been holding talks with the government on this issue should keep in mind that law couldn’t be passed to extend any tax-related favour to any particular industry as such a revenue move could easily be challenged in the courts as being an unconstitutional step. He said the drug manufacturers should get all the incentives and reliefs, which had been provided to other zero-rated industries in the country.

Qazi M Mansoor Dilawar, PPMA Chairman, hoped that the representatives of the drug industry would be able to convince the government to withdraw the GST. He said that otherwise, the PPMA stood firm to launch a movement against the latest taxation move of the government that could endanger the availability of essential medicines in the market. FPCCI Acting President, Khawaja Shahzeb Akram, who chaired the session, assured the fullest support to the drug manufacturers for their cause to keep the taxation regime simple for them in order to avoid shortage of medicines in the country.

For more information, contact:
Central Office,
Pakistan Pharmaceutical Manufacturers’ Association (PPMA)
House No: 474, Street No. 34, Sector I/8-2, Islamabad, Pakistan
Phone: +92-51-4435104
Director: +92-51-4435103
Fax: +92-51-4435105
E-mail: info@ppma.org.pk
Website: www.ppma.org.pk