Despite reduction of customs duty by 5 percent on pharmaceutical raw materials in budget 2012-2013, the pharmaceutical manufacturers are not satisfied by the measure, as they say the industry is already enjoying 5 percent customs duty on import of several chemicals used in manufacturing of drugs.
Federal Finance Minister Dr Hafeez Shaikh in his budget speech announced to reduce customs duty on 88 pharmaceutical raw materials from 10 percent to 5 percent.
Pharmaceutical manufacturers said that though the reduction of 5 percent customs duty was a healthy sign, but the government should have done more for providing relief to the industry.
Zahid Saeed of Pakistan Pharmaceutical Manufacturers Association (PPMA) was of the view that all other material used in packing of medicines were imported from other countries on which the industry pay sales tax. He said that at present a lot of life saving drugs were exempted from sales tax despite the fact that pharmaceutical manufacturers had to pay sales tax on packing materials of these drugs. "So the pharmaceutical manufacturers should also be allowed to charge sales tax from consumers on these drugs," Saeed demanded.
He said that they had proposed the government to provide gas connections to pharmaceutical manufacturers so they can generate electricity in order to run their plants, as the industry is suffering financial loses due to power outages, which was not met in budget 2012-13
"The customs duty on import of pharmaceutical raw material should have been brought to zero percent in order to create positive impact on pharma industry," said Asif Akhai, head of Akhai Industries.
"The 5 percent reduction in customs duty will not create any major impact on pharmaceutical industry," Akhai said, adding that customs duty should not be charged on import of any kind of pharmaceutical raw material.
He said that withholding tax on import of raw material should not be more than 1 percent.
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