Islamabad: In compliance with International Monetary Fund (IMF) recommendations, the federal government has decided to impose an 18% sales tax on herbal and homeopathic medicines. This decision revokes previous tax exemptions on these products.
The tax will affect a range of items, including herbal and homeopathic remedies for cough, cold, and flu, as well as supplements, serums, and creams. Herbal potions, jams, and saffron are also subject to the new tax, according to official documents. The sales tax will be implemented through the 8th schedule of the Sales Tax Act.
The decision is expected to lead to increased prices for these medicines, making them more expensive for consumers. The IMF had advised the Pakistani government to impose an 18% General Sales Tax (GST) on various categories, including food, medicine, petroleum products, and stationery, as part of its fiscal recommendations.
The IMF's recommendations, detailed in a report sent to Islamabad in February 2024, followed the IMF team's visit to Pakistan in December 2023. These recommendations are part of the fiscal year 2024-25 budget planning.
Prime Minister Shehbaz Sharif, addressing the National Assembly during a budget session, acknowledged the need to align the fiscal year 2024-25 budget with IMF recommendations. He expressed hope for a favorable response from the IMF and promised to present it to the house.
The move marks another step by the Pakistani government to meet the stringent demands set by the IMF in efforts to stabilize the country's economy.
