Changes in cigarette FED hailed

Islamabad : The Social Policy and Development Centre (SPDC) organised a policy dialogue on the 'revenue impact of changes in federal excise duty (FED) on cigarettes – Budget 2019-20' at a hotel here.

The speakers said the two-tier structure of FED on cigarettes introduced in the Budget 2019-20 was expected to lead to a significant reduction in tobacco use and enhanced revenue for government exchequer. They said in the budget 2019-20, the three-tier FED structure was changed into a two-tier system with enhanced tax rates for both low-price and high-price cigarettes. The speakers said the consumer prices of all leading brands of cigarettes were increased afterward.

They, however, said it was important to observe that increase in the consumer prices was not merely due to enhanced tax rates but the net-of-tax prices were also increased by the manufacturers.

The participants of policy dialogue said that high tobacco taxes can play an instrumental role in curbing tobacco use in the country.

They said the next step for the government should be to abolish the tier-based FED structure and introduction of a single, high, uniform tax be applied to all types of cigarettes.

They said the proposed move would not only help curb tobacco use in the country but would also contribute in generating more revenues that could be used for promoting public health.