ISLAMABAD: The Federal Board of Revenue has decided to increase Federal Excise Duty (FED) on cigarettes with effect from November 30.
According to FBR spokesman Dr Muhammad Iqbal, the Board is surging FED on cigarettes while acting on the announcement made in the Finance Act 2016.
Dr Iqbal said that the FED on locally-produced higher tier cigarette brands will be increased from Rs3,436 to Rs3,705 per 1,000 sticks and on locally-produced lower tier cigarette brands, from Rs1,534 to Rs1,649 per 1,000 sticks. The cigarette manufacturers will have to pay duty on the basis of increased rates for cigarettes sold on or after December 1, 2016, he added.
From November 30, 2016, the rate of FED would be Rs3,705 per thousand cigarettes for tier-I slab and FED would be Rs1,649 per thousand cigarettes for tier-II slab of cigarettes.
Through Finance Act 2016, the rates of FED on cigarettes were increased on a biannual basis. The measure was enforced through SRO 473(I)/2016 effective from June 4, 2016. According to S.R.O.473(I)/2016, the rate of duty would be Rs3,436 per thousand cigarettes on locally produced cigarettes if their on-pack printed retail price exceeds Rs4,000 per thousand cigarettes. The rate of duty would be Rs1,534 per thousand cigarettes where locally produced cigarettes if their on-pack printed retail price does not exceed Rs4,000 per thousand cigarettes.
The FBR has already directed the Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs) to ensure that FED is charged at new rates.
