The government has imposed a 17 percent sales tax on supplies to hospitals, has increased the operational cost of hospitals and medical treatment.

Presentation was given by the leading hospitals to the Federal Board of Revenue (FBR) Chairman disclosed that the omission of entry number 52-A from the Sixth Schedule of the Sales Tax Act, 1990 has changed the entire scene of the hospital sector whose supplies are slapped with the levy of sales tax.

The charge of sales tax on supplies to hospitals could increase the operational cost of a hospital and other medical services.

Due to this, the hospitals’ representatives explained, the essential supplies to the hospitals including equipment, consumables like syringes, needles, sutures, staples, packaging, tubing, catheters, medical glove, gowns, masks, adhesives, x-ray films, stores/parts, and other devices and tools used in hospitals or surgical environments have become chargeable to sales tax at the standard rate of 17 percent along with further sales tax at the rate of three percent.

Hospitals’ representatives said, the private sector covers approximately 70 percent of the population in Pakistan. Private sector healthcare contribution in Pakistan is based on funding through donations, zakat, and charity. While omitting entry number 52-A of the Sixth Schedule, This harmful effect on the healthcare system was somehow overlooked.

Hospitals, therefore, requested to take appropriate measures to restore the position prevailing prior to the referred amendment in Sales Tax Act, 1990 to safeguard the basic rights of the healthcare sector.

The hospitals’ representatives explained, that the hospitals as a health service providers for the sales tax purpose are covered under the jurisdiction of provincial sales tax authorities and they are not liable to be registered since the health services are not liable to sales tax in any of the provincial sales tax statutes. So, the charge of sales tax on supplies of equipment and consumables and then payment neither can be adjusted nor refunded and thus will include in cost price.

Source: propakistani.pk on Feb 17, 2022