Cigarettes now constitute 40% of the FED collection, marking a notable uptick.
ISLAMABAD: The Federal Board of Revenue’s (FBR) latest Yearbook (2022-23) data confirmed that share of cigarettes in overall Federal Excise Duty (FED) collection has jumped to 40 percent in 2022-23 due to higher FED rates.
Malik Imran Ahmed, Country Director of Campaign for Tobacco Free Kids (CTFK), shared insights with Business Recorder, debunking the tobacco industry’s claims regarding the impact of the Federal Excise Duty (FED) raise on sales and consumption. Contrary to industry assertions, the actual figures from the Federal Board of Revenue (FBR) indicate that the higher FED on cigarettes has not only bolstered FBR revenue in 2022-23 but has also led to a decline in cigarette production and sales.
This dual achievement aligns with the government’s objectives of increased revenue and reduced cigarette consumption.
Referring to FBR Yearbook data, Imran emphasized the authenticity of the figures, noting that cigarettes significantly contributed to FED revenues due to inflation and higher excise duty rates. He highlighted the health benefits, asserting that reduced consumption and sales would ultimately alleviate the health cost burden.
Imran addressed the tobacco industry’s complaints about production line closures, emphasizing that the factual position is evident in the FBR’s official book, which reveals a 40% share of FED from cigarettes in the overall FED collection.
He strongly urged the FBR to promptly implement the latest World Bank recommendation for a FED increase on cigarettes, as outlined in the Pakistan Development Update. The World Bank report suggests applying the current rate on premium cigarettes to standard cigarettes, projecting a substantial revenue gain of 0.4% of GDP.
Imran underscored the importance of aligning cigarette taxation with the World Bank’s recommendation to safeguard children’s health. He advocated for a substantial increase in tobacco taxes, in line with global health authorities’ advice, such as the World Bank and the World Health Organization (WHO).
Emphasizing the economic burden of tobacco-related illnesses, Imran proposed the introduction of a health levy on tobacco products. The funds generated from this levy could be directed toward healthcare initiatives and educational programs aimed at preventing tobacco use among children, aligning with well-established recommendations from global health authorities.
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