Tobacco tax SRO issued by FBR

A statutory regulatory order (SRO) was enacted for the price reduction of cigarettes by the Federal Board of Revenue (FBR) on Friday. This will lead to a decrease of Rs17 on a pack of cigarettes. The FBR spokesman Dr Muhammad Iqbal said that this SRO was a necessity in order to ensure no further revenue losses would be incurred. He said the SRO would be withdrawn once the budget gets passed through parliament.

The budget for financial year 2017-18 had suggested the introduction of a third tier by which only a miniscule tax of Rs16 would be charged on a pack of cigarettes. On the other hand, the Ministry of Health and services had suggested a Rs44 tax on a pack of cigarettes. This suggestion from the health ministry was supposed to be meant for discouraging smoking, which remains a health hazard and can cause many diseases including cancer etc.

A health ministry who wanted anonymity said the enactment of this suggestion wasn’t a right move on part of the government, since the budget was pending approval from parliament. He said . “We have been doing efforts and contacting parliamentarians to reject the proposal. But [after the SRO] the tobacco industry will now be in a position to seek stay order.”

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