ISLAMABAD: The federal government has accepted another demand of International Monetary Fund (IMF), withdrawing tax exemptions on herbal and homeopathic medicines and imposing an 18 per cent sales tax on these products, ARY News reported on Wednesday.
According to documents available with ARY News, the government has decided to impose 18pc sales tax on herbal and homeopathic medicines, including those used to treat cough, cold, and flu. The tax will also apply to herbal supplements, serums, and creams.
The sales tax on herbal and homeopathic medicines will be imposed through the 8th schedule of the Sales Tax Act. 18pc sales tax will also be levied on herbal potions, jams and saffron, the document said
The decision is likely to increase the prices of herbal and homeopathic medicines, making them more expensive for consumers.
The IMF had recommended the government of Pakistan to implement 18 per cent General Sales Tax (GST) on food, medicine, petroleum products, and stationery.
The IMF experts recommended the government of Pakistan to end sales tax relaxation in its report dispatched to Islamabad.
The IMF team visited Pakistan in December 2023, and dispatched its report in February 2024 with a set of recommendations for the FY2024-25 budget.
A day earlier, Prime Minister Shehbaz Sharif said that the government had to prepare the fiscal year budget 2024-25 while keeping recommendations of the International Monetary Fund (IMF) in mind.
Speaking at the budget session in the National Assembly, PM Shehbaz hoped to get a good response from the IMF. “If the response comes from the IMF, we will present it (before the house) on Wednesday,” he added.
