THIS is with reference to the report ‘Hard to defend tax exemptions withdrawal: FBR chief’ (Jan 1), according to which, the official said that of the exemptions worth Rs700 billion originally demanded by the International Monetary Fund (IMF), an amount of Rs530bn was undocumented in the pharmaceutical sector alone.
The industry, in the words of the FBR chief, passes Rs35bn input taxes to the people. Now that this particular tax will be refunded, the industry, he hoped, would transfer the relief to the people in the shape of reduced prices of medicines.
The FBR chief seems to be unaware of the nexus between the Drug Regulatory Authority of Pakistan (Drap) and the national pharmaceutical industry. The former allows the latter to raise prices under the pretext of rupee devaluation against the dollar which makes the raw material costlier. In fact, almost all such imports are made from the principals which means the additional money gets into the same pocket. This is smart accounting.
Besides, a tablet for headache was till recently available for Rs10 for a strip of 10 pills — Re1 per tablet. It has now been discontinued and has been replaced with the same name but with ‘extra strong’ effects which is sold for Rs60, or Rs6 per tablet; a six-fold increase which in itself is the source of many a headache.
The FBR chief may not do much about it, but he would do well to stop daydreaming about the possibility of some relief to the patients. Attempts to sell such dreams to the public also causes heachaches.
Abdul Ghaffar Gheewala
Published in Dawn, January 18th, 2022