Imposition of GST and Its Implication for Poor People of Pakistan:

Oxfam supports the campaign launched by The Network for Consumer Protection to challenge the recent imposition of General Sales Tax (GST) on medicines by the Government of Pakistan.

Oxfam has also been working on a campaign to “cut the cost” of medicines for poor people. This aims to highlight the impact that global trade rules being promoted by World Trade Organisation (WTO) are having on the poor and how their access to basic medicines is being systematically reduced through the patenting and other rules of WTO. In Pakistan poor people are most vulnerable to infectious and other diseases due to their harsh and unhygienic living conditions, malnutrition, poverty, inadequate public spending by the government, and inadequate health facilities available to them. They are the ones most in need of the health services and essential medicines and yet not able to afford them. We see health as economic investment enabling the poor to work regularly and thus meet their basic needs with dignity. We are concerned that the general sales tax imposed on the medicines will further restrict people’s access to health care as the price of medicines will go up.

The pricing of drugs is not only an issue for the developing countries, it is equally so for the rich countries. But in developing countries like Pakistan it has more adverse implications because of the limited budgetary resources available. The poor people themselves bear the burden of health spending in countries like Pakistan rather than it coming from national health budgets or insurance schemes. In Pakistan where more than 34% people live below the poverty line this increase in prices will impact on the health seeking behaviour in that they will delay or not seek treatment at all. This will lead to increase in morbidity and mortality rates, reduce economic production and hence increased poverty. We recommend to the Government of Pakistan that this decision is reviewed and the GST on medicines is lifted.

Azhar Hussain
Project Coordinator Pharmaceuticals
TheNetwork for Consumer Protection
40-A, Ramzan Plaza, G-9 Markaz
Islamabad
Pakistan.
Tel:00-92-51-2261085
Fax:00-92-51-2262495