FED on cigarettes increased

ISLAMABAD: The government has increased Federal Excise Duty (FED) on cigarettes through finance bill 2019-20 instead of imposing health levy, the budget document showed on Tuesday.

As per the finance bill tabled in the National Assembly, the government has abolished three-tier taxation system and come up with two-tier system by exploring possibilities to jack up revenue collection from Rs114 billion to Rs140 billion in the fiscal year 2019-20.

For locally produced cigarettes, if their on-pack printed retail price exceeds Rs5,960/thousand cigarettes, there will be a levy of Rs5,200/thousand cigarettes in the first slab. For the same, if their on-pack printed retail price does not exceed Rs5,960/thousand cigarettes in the second tier, then the levy will be Rs1650/thousand cigarettes.

An official of Federal Board of Revenue said the price of higher price brands would be increased because of the increased taxation. “In order to discourage illicit cigarettes, the price of low brands will not go up in the local market,” the official added.