ISLAMABAD: Medicine prices in the country are likely to skyrocket following the imposition of an 18% sales tax in the wake of the federal government's decision to deregulate the prices of non-essential medicines. According to a The News report published on Tuesday, the move will allow pharmaceutical companies to set and sell the prices of medicines as per their will. "The government has proposed an 18% sales tax on medicines in the next budget on the recommendation of the International Monetary Fund (IMF) as part of a broader effort to rationalise tax policies and increase revenue," an official of the Ministry of National Health Services, Regulations and Coordination (NHS, R&C) told the publication.
Authorities, the official added, have already deregulated the prices of thousands of medicines. Therefore, the prices of medicines will be out of the people's reach when combined with the 18% sales tax. The officials within the finance circles have claimed that the recommendation to impose an 18% sales tax is part of a set of measures suggested by the IMF to improve Pakistan’s fiscal health, which also includes bringing unprocessed food, petroleum products and stationery under the standard GST rate.
The Washington-based lender's recommendation for taxing medicines, however, comes at a time when the previous caretaker government had already deregulated medicine prices. It's move ended the Drug Regulatory Authority of Pakistan’s control over fixing prices and allowed pharmaceuti.