‘Sin tax’ expected to generate Rs50bln

KARACHI: The Federal Board of Revenue (FBR) is expected to ring up additional Rs50 billion in revenue from the proposed ‘sin tax’ on cigarettes and beverages, well-placed sources said on Friday.

The government planned to impose Rs10 on each 20-packet of cigarettes and Re1 on a beverage bottle. The government intended to utilise the money obtained from ‘sin tax’ for health insurance scheme. The tax money will also be utilised for treatment of patients affected by serious diseases.

Sources in tobacco industry said the imposition of the proposed tax would increase tax evasion and promote production of illicit cigarettes in addition to open the doors for smuggling.

The plan is to prevent leakage of revenue and under-reporting of production and sales, and to ensure proper payment of federal excise duty and sales tax on the manufacture and sale of tobacco products.