ISLAMABAD: Government proposed to remove Sales Tax exemption under sixth schedule on supplies to charitable hospitals in Finance Bill 2024-25.

According to details, Finance Bill proposed by government eliminated entry number 166 of Sixth Schedule of S.T.A. 1990, imposing 18 percent Sales Tax on supplies to welfare healthcare sector. This new tax policy applies to all supplies of charitable hospitals with 50 beds and above, as well as 200-bed welfare hospitals for purpose of teaching have to pay 18 percent of Sales Tax. Imposition of an 18 percent of Sales Tax extends to range of medical supplies and equipment-including vaccines, testing kits, tubes, medical gloves and masks used by these institutions. Similarly, surgical instruments, operation equipment and machinery parts used in charitable and welfare hospitals are now subject to 18 percent of Sales Tax. Decision to impose tax on welfare and charitable hospitals may significantly contribute to increase operational costs of healthcare and medical treatment in Pakistan.