KARACHI: Large Taxpayers Unit (LTU) has proposed increase in federal excise duty (FED) rate from Rs0.75 per filter rod to Rs5 per filter rod.
Sources said that the Federal Board of Revenue (FBR) is considering the proposed hike in FED on sales of cigarettes in the budget 2018-19 as measures taken in the last budget were resulted in decline of FED during first nine months of current fiscal year.
The increase in FED has been recommended in order to discourage smoking as per directives of World Health Organization (WHO) and increase the revenue.
The FBR said that abolishing third tier of FED on cigarettes as it promoted the sale of cigarettes to double and no positive impact on the revenue.
The 3rd tier for FED on cigarettes was introduced through Finance Act, 2017, which resulted in reducing the amount of FED per 1,000 sticks to half of the cigarettes which fall in the price range of the third tier.
The collection of FED on cigarettes sales has reduced by 2.5 percent to Rs7.5 billion during first nine months of current fiscal year as compared with Rs7.6 billion in the corresponding months of the last fiscal year.
