According to data compiled by the Federal Board of Revenue (FBR), the share of cigarettes in the overall Federal Excise Duty (FED) collection increased to 40 percent during the fiscal year 2022-23, up from 39.3 percent in the previous fiscal year, 2021-22.
As reported by BR, the FBR data indicates a notable 15.4 percent increase in net FED collection during 2022-23, translating to an additional Rs49.1 billion compared to 2021-22. Despite this increase, the share of FED in the total FBR collection remained unchanged at 5.2 percent for the fiscal year 2022-23.
Major sectors contributing to FED revenues include cigarettes, cement, concentrates used in beverages/foods, and services. All major sectors experienced positive growth in 2022-23, except for cement, which recorded a negative growth.
The share of cement in the FED collection decreased to 18.7 percent in 2022-23, compared to 24.6 percent in 2021-22. Beverages (concentrates) saw an increase in their share, rising from 7.7 percent in 2021-22 to 9.6 percent in 2022-23.
Additionally, the share of air travel in total FED collection increased to 4.9 percent in 2022-23, up from 3 percent in 2021-22.
The surge in collection from items like cigarettes, concentrates, and aerated water can be attributed to both inflation and an increase in duty rates.
The uptick in FED collection from air travel is a result of increased duty rates on air travel, combined with the post-COVID easing of restrictions.
The top ten sectors collectively contribute about 94 percent, with cigarettes leading with a 39.9 percent share, followed by cement with 18.7 percent, and concentrates with a 9.6 percent share, as per FBR reports.
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