ISLAMABAD: The World Health Organization (WHO) has exerted significant pressure on the government of Pakistan to further raise the Federal Excise Duty (FED) on all cigarette brands in the upcoming budget for fiscal year 2025-26, accoeding to sources cited by Business Recorder.
The Federal Board of Revenue (FBR) is facing international calls to increase the FED due to the health risks associated with smoking.
Officials acknowledged that although two leading cigarette manufacturers have reported a decrease in sales due to the current 200% FED, the drop in volumes does not diminish the fact that smoking is harmful to health. They added that a minimum standard of taxes on cigarette sales has been set internationally.
During a recent meeting of the National Assembly’s Standing Committee on Finance, FBR Chairman Rashid Mahmood Langrial admitted the lack of enforcement measures to combat the illicit cigarette trade in the country. He revealed that while 10 trucks of smuggled cigarettes are intercepted, only one is confiscated, owing to the limited capacity of the tax machinery.
Langrial noted that new powers being granted to provinces would aid in curbing the illegal cigarette trade at the retail level with the support of provincial law enforcement agencies. He further stressed that any cigarette lacking the mandatory tax stamp would be deemed illegal, and the FBR is developing a standard operating procedure (SOP) for enforcement with the assistance of provincial authorities.
