Govt Imposes Additional Rs. 36 Billion Tax on Cigarettes

The Federal Government on Monday promulgated an ordinance to impose an additional Rs. 36 billion tax on cigarettes and Rs. 2 billion on tobacco processing.

According to the details, the additional tax will increase the prices of cigarettes by Rs. 20 to Rs. 30 per pack for tier-1 brands and Rs. 10 per pack for cigarettes of tier-2 brands like Capstan.

Meanwhile, the government has jacked up advance federal excise duty (FED) tax from Rs10 per kg to Rs390 per kg on tobacco processing that will help collect Rs. 2 billion.

Furthermore, the FED on locally manufactured cigarettes has been enhanced from Rs5,900/1m000 sticks to Rs6,500/1,000 sticks for tier-1 and from Rs1,850/1,000 sticks to Rs2,050/1,000 sticks for tier-2 cigarettes.

The decision has been made ahead of the International Monetary Fund (IMF) executive board meeting scheduled to be held in Washington on August 29.

Read more: Govt Officially Lifts Import Ban on Luxury Items.

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