The government has increased the sales tax rate from 1% to 18% on raw materials used in producing pharmaceutical components, a move likely to increase drug prices.
The Finance Bill 2024 proposes that the standard sales tax rate will apply to all items under Chapter 30 of the First Schedule, with certain exceptions under the Customs Act 1969.
The bill also suggests adjustments to the Sales Tax Act and the Customs Act to remove certain exemptions for pharmaceutical products.
The standard 18% sales tax is also imposed on medical treatment and diagnostic kits/equipment across various specialities, including cardiology, neurology, oncology, and urology.
Additionally, goods supplied to charitable hospitals with 50 or more beds, as well as commodities imported by non-profit institutions, will be subject to the 18% sales tax.
The government has also imposed a 20% sales tax on the import of other medical items, such as syringes, needles, and catheters.
