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KARACHI: Pharmaceutical distributors have warned the government of shutting down their operations in the city if the proposed collection of advance from the distributors was not omitted from the Finance Bill 2021-22.

Speaking at a hurriedly called press conference at the Karachi Press Club here on Tuesday, Pakistan Chemists and Druggists Association (PCDA) chairman Salahuddin Sheikh urged Finance Minister Shaukat Tarin to withdraw the decision to impose Section 236-G and 236-H of income tax on the pharmaceutical sector.

Flanked by Ghulam Hashim Noorani and Abdul Samad Budhani, the PCDA chairman was of the view that implementation of Section 236-H on the pharma sector would cast a heavy burden on the distributors who are covering more than 6,000 retail pharmacies in Karachi.

"It is very difficult to collect NTN/CNIC from all the outlets and the advance tax collection besides reporting will not be possible," he argued, adding that it would be a hectic exercise to check thousands of retailers as filers or non-filers at the time of invoicing.

Thus, distributors will not be able to collect and deposit 0.5% and 1% advance tax to justify their sales.

He added that the process would also require additional staff or need more consultants to appoint to sort out filers/non-filers to collect 0.5% or 1% tax.

He said heavy compliance and penalties would also increase the cost of business, which is already on a higher side by serving pharmaceutical supplies which require urgent supplies, repeated supplies and to maintain temperature sensitivity.

He further said every manufacturer, distributor and retailer was answerable for their own taxes, and this burden of tax collection and its lengthy reporting/ monitoring was not our responsibility, questioning "why the Federal Board of Revenue (FBR) is hell bent upon shifting their load onto the business community"?

He said the pharmaceutical sector was also regulated by the Drug Regulatory Authority of Pakistan (DRAP) under the Drug Act 1976, and most of the manufacturers and distributors were appearing on ATL and due to huge turnover they were declared withholding agents and already monitored by the FBR for the WHT under various Sections like 153.

Copyright Business Recorder, 2021

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