ISLAMABAD: The Federal Board of Revenue (FBR) has increased Federal Excise duty (FED) on cigarettes.
“In exercise of the powers conferred by clauses (B) of sub-section (3) of section 3 of the Federal Excise Act, 2005, the Federal Board of Revenue (FBR) is pleased to direct that the excise duty shall be levied and collected on fixed basis at the rates specified”, said the notification issued by the FBR.
For locally produced cigarettes with retail prices exceeding Rs4,500 per thousand cigarettes, the tax will charge be charged at Rs3,964. In addition to this, if locally produced cigarettes with printed price exceed Rs2,925 per thousand cigarettes, but does not exceed Rs4,500 per thousand cigarettes, the tax will be collected at Rs1,770.
In tier 3 of locally produced cigarettes, if their retail price does not exceed Rs2,925 per thousand cigarettes, Rs840 will be collected in taxes.
The Ministry of Health had given the budget proposal to the tax department to increase the cigarettes price by Rs44 per packet as the domestic industry had to bear the loss of Rs40 billion due to the new slabs introduced by the FBR.
The number of smokers in the country has increased with the introduction of tier 1, tier 2 and tier 3 systems, thus the cases of cancer are increasing with the passage of time.
Official sources said that FBR has only received Rs2 billion under the new tier 3 system. The FBR has imposed Rs10 as health tax on the purchase of tobacco in addition to this. Resultantly, a surge of 71 per cent increase in cigarette production has been reported from July 2017 to November 2017.
