https://arab.news/yytu6
- Government promised in January to refund tax after full consumption of raw material to prevent price hikes in local market
- Industry leaders say will take them more than year to utilize imported raw material while manufacturing medicines
ISLAMABAD: Pakistan’s pharmaceutical industry on Thursday threatened to hold a nationwide strike and shut down factories if the government failed to withdraw a 17 percent tax on the import of medicinal raw material in the next five days.
The government imposed the tax in January by introducing a supplementary finance bill, commonly known as mini-budget, while promising that the amount would be refunded to the industry to prevent an increase in drug prices in the local market.
The government also withdrew tax exemptions on numerous items and levied additional taxes of Rs360 billion to meet some major conditions imposed by the International Monetary Fund for the resumption of a $6 billion bailout package.
Industry officials informed the government had reneged on its promise, adding the pharmaceutical industry’s Rs2 billion had yet to be refunded.
“We will be forced to protest in the streets if the government doesn’t withdraw this unjustified tax in the next five days,” Qazi Muhammad Mansoor Dilawar, chairman Pakistan Pharmaceutical Manufacturers Association, said during a news conference in Islamabad along with other top industry office bearers.
He said the industry representatives had recently held three meetings with finance minister Shaukat Tarin before deciding to go public with their grievances since their efforts had gone to a waste.
“The government apparently wants to crush the pharmaceutical industry by only allowing tax refunds after raw material consumption,” Dilawar maintained while adding it would take the industrial players over a year to fully utilize the imported raw material to manufacture medicines.
“We are not willing to accept this and urge the government to either fully withdraw the tax or refund it at the purchase stage,” he said.
He pointed out there was a risk of medicine shortages and price hikes of essential drugs if the government would not accept these demands.
“We cannot increase the price of any medicine on our own,” he clarified, “but the shortage will surely create a black market.”
The pharmaceutical industry is among the most regulated sectors in Pakistan, and only the federal government is authorized to fix the prices of medicines on the recommendation of a drug regulator.
The industry has also been meeting about 80 percent of the local demand of lifesaving drugs. It also contributes to the country’s export revenue and provides jobs to about one million people.
“Our country and people cannot afford medicine imports due to the given economic conditions, so the government should facilitate the pharmaceutical industry instead of imposing unjustified taxes on it,” Dilawar added.