The federal government has decided to provide big sales tax relief to the pharmaceutical industry through a Presidential Ordinance to be issued following the International Monetary Fund (IMF) Executive Board meeting on August 29.
According to a senior Ministry of Finance official, the government will restore the pharmaceutical sector’s pre-budget (2022-23) status in the upcoming Ordinance.
Prior to the budget (2022-23), the pharmaceutical industry was exempt from sales tax, that would now be replaced with a 0% sales tax.
The proposal to allow zero-rate sales tax on pharmaceutical raw materials imported and supplied locally has been approved by the Ministry of Finance. The import and local supplies of pharmaceutical products would be exempt from sales tax.
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According to the officials, the New Ordinance would repeal the reduced rate of the 1% sales tax imposed on pharmaceutical raw materials and active pharmaceutical ingredients.
