HealthTech

Impact of New Taxes on Medical Devices: Challenges & Consequences

Synopsis: The Pakistani government's recent decision to impose sales taxes on over 200 medical devices, including critical diagnostic and treatment instruments, has sparked widespread concern among healthcare experts and industry stakeholders. This move, outlined in the 2024-25 fiscal budget, is expected to escalate healthcare costs by 25% to 30%, significantly affecting both public and private healthcare sectors across the country.
Monday, July 15, 2024
medical devices
Source : ContentFactory

Masood Ahmed, Chairman of the Healthcare Devices Association of Pakistan, highlighted that this tax will apply to all imported medical devices and diagnostic kits, affecting accessibility to essential healthcare services, especially for economically disadvantaged patients reliant on public hospitals. The association has urgently petitioned Prime Minister Shehbaz and Finance Minister Aurangzeb to reconsider this tax, emphasizing its potential to render treatment unaffordable for many.

Dr. Syed Junaid Ali Shah, former provincial health minister and President of the Private Hospitals and Clinics Association, expressed grave concerns over the 15% sales tax on diagnostic kits, which he believes will disproportionately burden patients, particularly those from lower-income backgrounds. This additional financial strain on private healthcare providers could lead to increased healthcare costs across the board, as hospitals struggle to absorb rising operational expenses.

Moreover, the Sindh government's introduction of a 15% tax on medical services exacerbates the financial strain on patients seeking private healthcare, compounding the challenges faced by the healthcare sector. This decision has been met with criticism from various quarters, including doctors' organizations and economists, who argue that such taxation measures could hinder investment in essential healthcare infrastructure and human capital development.

In response to these developments, healthcare industry leaders are advocating for the recognition of healthcare as a necessity rather than a luxury, urging policymakers to consider the broader implications of tax policies on public health outcomes. The ongoing dialogue between healthcare providers, regulatory authorities, and government officials underscores the urgent need for balanced fiscal policies that support equitable access to healthcare while ensuring sustainable growth of the healthcare sector in Pakistan.