Duty, VAT exemptions on pharma raw materials positive: BAPI

Bangladesh Association of Pharmaceutical Industries. logo

The Bangladesh Association of Pharmaceutical Industries (BAPI) or Bangladesh Pharmaceutical Industry Association is seeing the proposal to further increase duty and tax exemption on import of raw materials for the pharmaceutical industry in the budget for the fiscal year 2025-26 as positive. The government's decision will strengthen the country's pharmaceutical industry.

The proposal of various duty exemptions on import of raw materials for the pharmaceutical API industry will help the pharmaceutical API industry to become more established. Especially, the path to marketing very high-priced anti-cancer drugs will be paved. It is to be noted that 90 percent of APIs are imported in the country. This tariff policy will help in the gradual growth of the API industry to overcome this imported situation. At the same time, the path will be paved for the production of many APIs in the country. As a result, the price of all anti-cancer drugs will be stable and availability will increase. The country will ensure that high-tech and quality medicines are always available to the general public.

We hope that the pharmaceutical industry will not only meet the domestic needs of the country, but will also become one of the export sectors if it receives some more incentives. Another thing to mention here is that there is still a high duty on sandwich panels and laboratory furniture used in the investment of the pharmaceutical industry. Whereas earlier it was only 1 percent. We hope that the government concerned will pay extra attention here and bring this duty to the previous position in the case of panels for the new pharmaceutical industry.

Financial Advisor Salehuddin Ahmed said in his budget speech, 'Special importance has been given to increasing the scope of services, developing infrastructure and recruiting skilled manpower to bring all citizens under universal healthcare by 2030. The recruitment of doctors, nurses, technicians, pharmacists and health assistants has been accelerated to fill the vacant posts in the health sector, and a comprehensive plan has been adopted to create the necessary posts. The Honorable Financial Advisor has proposed reducing duties and taxes on the import of machinery and equipment for the establishment of all hospitals with more than 50 beds, in addition to referral hospitals. In response to the budget, the Pharmaceutical Industry Association said, “Expanding the above opportunity in the medical system will greatly benefit the country’s patients.”

In addition, in this year’s budget, hybrid and electric vehicles, including general and ICU ambulances, have been conditionally exempted from VAT until June 30, 2030. Bangladesh Pharmaceutical Industry Association believes that this will play an important role in the health care of the people.

Bangladesh Pharmaceutical Industry Association believes that all the good initiatives taken by the government in this year’s budget are commendable. However, those who will implement these good initiatives, especially the Board of Revenue and the concerned government officials, must be diligent and sincere in performing their duties properly.

Meanwhile, in addition to the above benefits provided in the proposed budget, an appeal is being made to consider the following issues and include them in the final budget.

1. In the last fiscal year, the minimum tax rate for non-listed companies was 25%, which has been increased to 27.5% in this budget. However, due to the increase in costs in all areas, almost all pharmaceutical companies are going through an unfavorable period. At this time, this increase in the corporate tax rate will create an additional tax burden on non-listed pharma companies. In such a situation, an application is being made to keep the corporate tax rate at 25%.

2. The tax free limit at the individual level has not been increased in the proposed budget and in some cases, due to changes in conditions, the tax of officials and employees employed in the industry will increase. This will reduce the actual income of the officials and employees. It was requested to consider the matter.

3. The government has set the minimum corporate tax amount for companies at 1% of the total sales revenue in the proposed budget, which was previously 0.6%. Since most pharma companies are now struggling to make a profit, this increase in the minimum tax will greatly reduce the capacity of pharma companies. If they do not make a profit, the companies will have to pay this tax from their capital - which is not logical in any way. Considering the matter, it was requested to keep the minimum tax rate at the previous level.