The financial minister, Ishaq Dar, announced the budget for the upcoming fiscal year on Friday, 26th May 2017. This is the fifth consecutive budget by PML-N’s government, with a total outlay of Rs. 4.75 trillion.
However, an alarming situation has been created for smokers and those in the illicit business of low-quality tobacco. It has been announced that there will be an increase in the excise duty on cigarettes, which will lead to an increase in the average price of a pack of cigarettes as well.
It is believed that this tax has been imposed due to the elevating proportions of the sale of illicit and non-duty paid cigarettes. The sale of such cigarettes causes loss of revenue and also imposes serious health threats due to lack of quality controls. According to reports, 80,000 people died annually due to smoking in 2013 within Pakistan. This number increased to 100,000 people dying annually by the year 2015. The Government is trying everything to curb production and the sale of such illicit cigarettes.
Hence, in the budget announced today, it was clearly stated that Pakistan Tobacco Board will be required to collect a tax of 5% at the time of collection of the cess on tobacco. Moreover, applying the said excise duty on such cigarettes will help to reduce the revenue loss from this sector, and it will help show the discourage towards smoking of these illicit and low-quality cigarettes.
Electric cigarettes, also known as E-cigarettes, are not completely classified in the same group as above, however, they impose serious health threats as well. They are subjected to paying a 3% customs duty, although it has been proposed that this duty should be increased to 20%.
Federal Excise Duty has also been increased on the following items:
- Cosmetics for women
- Imported juices, drinks etc.
- Electronic items such as cell phones
- Imported canned foods