[Ip-health] Pakistan: TheNetwork for Consumer Protection on GST
Aziz ur Rehman
aziz@thenetwork.org.pk
Sat, 23 Mar 2002 13:40:35 +0500
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Stop taxing the poor
patients
Demand to immediately withdraw the 15% General Sales Tax on Medicines
“If you can’t help them – dump them, seems like the policy of the
government” said the representative of the TheNetwork for Consumer
Protection while addressing a press conference. The press conference was
organized to condemn the government decision and raise a demand for
immediate withdrawal of 15% GST slapped on all kinds of medicines by the
government.
Dr. Zafar Mirza sharply criticized Government’s policy as grossly
unjust, exploitative and inequitable. He said that in the presence of
already very high drug prices, the GST would serve as a last nail in the
coffins of sick and poor. On the one hand health is considered as a
basic human right and on the other hand, not only that government has
failed to ensure provision of basic health services to the people (not
more than 20% people are served through public health care system) but
also it is making almost impossible for people to have financial access
to needed treatments even if they want to buy it out of their shallow
pockets. He termed the government action as “absolutely insensitive” on
two accounts: one, that instead of protecting the poor it has planned to
“earn” revenue from them and that too at the behest of IMF and two, the
policy is absolutely blind to recognized market failures in health.
On 10th of December 2001 government announced drug price increase of 3%
on controlled and 4% on decontrolled category of drugs respectively.
Apparently a very benign increase in drug price but in fact the prices
went up to 40%. Such an increase in medicine prices is due to the tricky
policies of government, whose brunt is to be faced by the poor
consumers. While still in a sate of shock due to the price increase in
last December this new increase is the most dreadful news they expected.
The GST policy is symbolic of the elitist economy – where rich become
richer and are diligently protected by the State and poor become poorer
and are left to wither. The Rs. four billion revenue collected at the
cost of sick and poor could easily be gathered from the elite classes by
just making them to pay what they owe to the State in the form of unpaid
taxes (total annual tax evasion amounts to Rs. 152 billion), defaulted
loans (29% of total advances from public sector banks go astray) etc.
not to mention the off-shore siphoned billions. Governement’s claim that
collected Rs. four billion would be spent on health sector also sounds
farcical as no specific policy in this regard has been made public.
It is a strangest and most damaging public policy which, people wonder,
how the President Pervaiz Musharraf has endorsed. It is juxtaposed with
the stated objectives of the Government i.e. to make basic services of
health and education accessible to the people! On the one hand there is
a lot of lip service to poverty eradication and on the other hand poor
are especially being targeted. Governments, in many countries take
special measures to insulate the prices of basic goods and services from
being kicked up by having special regulations. They are neither fully
deregulated nor taxed in order to keep them affordable by the people,
especially the lower classes. Many western countries, who champion the
cause of free market economy, themselves formulate special economic and
taxation policies back home to ensure the provision of basic services to
their population. It seems like our Governments economic policy is
becoming more loyal than the king.
Pakistan currently ranks 135th in the human development scale out of 174
countries and its health care system ranks 122nd among 191 countries in
terms of “over all health system performance”.
Dr. Zafar Mirza said that prices of medicines are matters of life and
death for the ill and the poor people. Keeping in view the inelasticity
of demand, poor buy medicines even if they have to sell their other
belongings – and yet Government deliberately wants to further increase
the drug prices! From public health perspective Government should not
forget that untreated communicable diseases, because of people’s lack of
access to the needed medicines can further increase the burden of these
diseases on society.
TheNetwork has demanded an immediate withdrawal and review of GST policy
on medicines before a public outcry erupts. The organization is going to
run a campaign against this policy and it has also initiated a study
into this area and soon a detailed document would be released on the
implications of this policy.
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<b>
<u>Stop taxing the poor patients</u></b>
<br><b>Demand to immediately withdraw the 15% General Sales Tax on Medicines</b>
<p>“If you can’t help them – dump them, seems like the policy of the government”
said the representative of the TheNetwork for Consumer Protection while
addressing a press conference. The press conference was organized to condemn
the government decision and raise a demand for immediate withdrawal of
15% GST slapped on all kinds of medicines by the government.
<p>Dr. Zafar Mirza sharply criticized Government’s policy as grossly unjust,
exploitative and inequitable. He said that in the presence of already very
high drug prices, the GST would serve as a last nail in the coffins of
sick and poor. On the one hand health is considered as a basic human right
and on the other hand, not only that government has failed to ensure provision
of basic health services to the people (not more than 20% people are served
through public health care system) but also it is making almost impossible
for people to have financial access to needed treatments even if they want
to buy it out of their shallow pockets. He termed the government action
as “absolutely insensitive” on two accounts: one, that instead of protecting
the poor it has planned to “earn” revenue from them and that too at the
behest of IMF and two, the policy is absolutely blind to recognized market
failures in health.
<p>On 10th of December 2001 government announced drug price increase of
3% on controlled and 4% on decontrolled category of drugs respectively.
Apparently a very benign increase in drug price but in fact the prices
went up to 40%. Such an increase in medicine prices is due to the tricky
policies of government, whose brunt is to be faced by the poor consumers.
While still in a sate of shock due to the price increase in last December
this new increase is the most dreadful news they expected.
<p>The GST policy is symbolic of the elitist economy – where rich become
richer and are diligently protected by the State and poor become poorer
and are left to wither. The Rs. four billion revenue collected at the cost
of sick and poor could easily be gathered from the elite classes by just
making them to pay what they owe to the State in the form of unpaid taxes
(total annual tax evasion amounts to Rs. 152 billion), defaulted loans
(29% of total advances from public sector banks go astray) etc. not to
mention the off-shore siphoned billions. Governement’s claim that collected
Rs. four billion would be spent on health sector also sounds farcical as
no specific policy in this regard has been made public.
<p>It is a strangest and most damaging public policy which, people wonder,
how the President Pervaiz Musharraf has endorsed. It is juxtaposed with
the stated objectives of the Government i.e. to make basic services of
health and education accessible to the people! On the one hand there is
a lot of lip service to poverty eradication and on the other hand poor
are especially being targeted. Governments, in many countries take special
measures to insulate the prices of basic goods and services from being
kicked up by having special regulations. They are neither fully deregulated
nor taxed in order to keep them affordable by the people, especially the
lower classes. Many western countries, who champion the cause of free market
economy, themselves formulate special economic and taxation policies back
home to ensure the provision of basic services to their population. It
seems like our Governments economic policy is becoming more loyal than
the king.
<p>Pakistan currently ranks 135th in the human development scale out of
174 countries and its health care system ranks 122nd among 191 countries
in terms of “over all health system performance”.
<p>Dr. Zafar Mirza said that prices of medicines are matters of life and
death for the ill and the poor people. Keeping in view the inelasticity
of demand, poor buy medicines even if they have to sell their other belongings
– and yet Government deliberately wants to further increase the drug prices!
From public health perspective Government should not forget that untreated
communicable diseases, because of people’s lack of access to the needed
medicines can further increase the burden of these diseases on society.
<p>TheNetwork has demanded an immediate withdrawal and review of GST policy
on medicines before a public outcry erupts. The organization is going to
run a campaign against this policy and it has also initiated a study into
this area and soon a detailed document would be released on the implications
of this policy.
<br>
<br> </html>
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