FBR enhances FED for locally produced cigarettes

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ISLAMABAD: The Federal Board of Revenue (FBR) on Thursday issued a notification of the enhancement in the rates of locally produced cigarettes.

The notification available with this scribe stated that locally produced cigarettes prices have been increased from Rs1 to Rs 4 in the three-tier system. It stated that the Federal Excise Duty (FED) on different categories of locally produced cigarettes was also revised upwards.

The FED for locally produced cigarettes has been enhanced from Rs3964 to Rs3970, based on the condition that the printed retail price exceeds Rs4500 per thousand cigarettes.

Meanwhile, locally produced cigarettes if their printed retail price on the pack exceeds Rs2925 per thousand cigarettes but does not exceed Rs4500 per thousand cigarettes, the FED will be increased from Rs1770 to Rs1776.

Lastly, locally produced cigarettes if their on-pack printed retail price does not exceed Rs2925 per thousand cigarettes, the FED on cigarettes would be enhanced from Rs848 to Rs854 per one thousand cigarettes.

It is pertinent to mention here that the tax department had introduced the three tier system in the last fiscal year.

The justification of introducing the three-tier system was to discourage smuggled cigarettes by increasing the rates in the country.

The FBR officials claimed that they have confiscated millions of smuggled cigarettes in different parts of the country but on the other hand, a special audit of multinational cigarettes companies revealed that the tax department had to face a loss of Rs60 billion by the imposition of the current three-tier system.

The tobacco companies earned Rs30 billion through this system, the special audit report had stated. It is worth mentioning here that President of Pakistan has signed the Finance Bill 2018 on Tuesday after that the tax department issued the notification.