Pharma sector announces countrywide sit-ins

KARACHI: Pharmaceutical sector has announced countrywide sit-ins and closure of pharmacies after Eidul Azha for indefinite period against the collection of advance tax through distributing companies. Talking to Business Recorder, Samad Budhani – Spokesperson Pakistan Chemists and Druggists Association (PCDA) urged to the federal government to withdraw the imposition of Section 236-G and 236-H of income tax on the pharmaceutical sector.

“We will hold sit-in at D-Chowk Islamabad, if our demands are not met”, Samad warned.

He said implementation of Section 236-H on the pharma sector has 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 percent and 1 percent advance tax to justify their sales.

Samad added that the process required additional staff or need more consultants to appoint to sort out filers/non-filers to collect 0.5 percent or 1 percent tax.

He said heavy compliance and penalties have 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”?

Samad 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