Drug prices to rise as 18pc sales tax imposed on raw materials

The government has raised the sales tax rate to 18 per cent from 1pc on raw materials used in producing pharmaceutical active components and goods, which is expected to spike drug prices. The Finance Bill 2024 proposed that the standard sales tax rate will be applied to all items classified under Chapter 30 of the First Schedule with exceptions to the Customs Act 1969. The bill suggested several adjustments to the Sales Tax Act and the Customs Act to remove certain exemptions for pharmaceutical products. The sales tax, at a standard rate of 18pc, is also imposed on medical treatment and diagnostic kits/equipment—cardiology/cardiac surgery, neurovascular, electrophysiology, endosurgery, endoscopy, oncology, urology, gynecology, disposables, and other equipment.