Tax on tobacco

While announcing the budget for 2018-19, the finance minister proposed a health levy on tobacco. For the imposition of health levy on tobacco, the Pakistan Tobacco Board (PTB) or its contractors at the time of collecting cess on tobacco – directly or indirectly – shall collect a health levy at the rate of Rs10 per kilogramme from every person purchasing tobacco, including manufacturers of cigarettes. It merits a mention that the Senate Standing Committee on Finance and Revenue in its recent meeting held in Islamabad agreed, in principle, to increase federal excise duty on cigarettes, if the authorities withdraw the proposed health levy of Rs10 per kilogram on tobacco.

The committee further agreed that it would recommend the government to withdraw the proposed health levy and tasked the Federal Board of Revenue (FBR) to come up with a proposal on increased taxation on cigarettes. In light of this, the federal government should reconsider the proposed health levy of Rs10 per kilogramme on tobacco to save tobacco growers from the new health levy.

Khan Faraz

Peshawar