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Sunday, 9 February 2020

FinMin to exempt 74 pharma materials from VAT

LEGISLATION WATCH- FinMin mulls VAT exemptions for 74 raw materials used by med makers: The Finance Ministry decided at the end of last month to exempt from VAT 74 raw materials used in the manufacturing of pharma products as part of its draft amendments to the VAT Act, according to documents seen by Al Mal.

Would this be enough? A Tax Authority official said last week that the government could move to exempt some pharma production inputs from VAT, after manufacturers called for a wider exemption from the tax on their products. In 2016, they were granted exemptions on active ingredients used in their products, but are now arguing that the exemption does not cover other production inputs.

We should be getting more clarity on the VAT amendments later this month: The ministry has kept fairly silent about its plans thus far revealing only that paper manufacturers may be in line for a tax exemption and that the changes would try to ensure that more registered corporate income tax payers file VAT returns and pay their taxes.

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