Business

Taxes to be increased on cigarettes, cell phones

Taxes to be increased on luxury items, duty on 1800cc cars increased to 20 per cent.

News Desk September 18, 2018

Cigarettes are seen during the manufacturing process in the British American Tobacco Cigarette Factory (BAT) in Bayreuth, southern Germany, in this April 30, 2014 file photograph. PHOTO:REUTERS

Finance Minister Asad Umar announced an increase in taxes on cigarettes, "expensive" phones and other luxury items while reading out federal budget amendments during the National Assembly's session on Tuesday.

Umar said taxes would be increased on items used by the rich and specified that the duty on cars with 1800cc engine capacity has increased to 20 per cent.

Govt working on increasing tax on cigarettes

The previous government had been working on a proposal to increase cigarette taxation earlier in April after the health ministry proposed the addition to discouraging tobacco consumption.

Sources told The Express Tribune in April that the Finance Division had realised that it had made a mistake by reducing the excise duty on cigarettes and now it wanted to withdraw the incentive.

In a letter sent to the FBR, the Ministry of Health recalled that prior to the FY18 budget, it had proposed a tax of Rs44 per pack on the lower slab of all cigarette brands to counter health risks and boost revenue.

Health ministry wants higher taxes on tobacco firms

According to a study, a uniform excise duty of Rs44 per pack of 20 cigarettes could reduce the number of smokers by 13.2%, increase tax revenue by Rs39.5 billion, reduce by 0.65 million the premature deaths caused by smoking and prevent 2.55 million youth from starting smoking.

Apart from these, the tax measure will help curb the illicit trade in tobacco products.

However, in the Finance Act 2017, the ministry’s suggestion was turned down and the government inserted a new tax slab with a reduced excise duty of Rs16 per pack which did not only boost cigarette production but also pushed down revenue collection.

Cigarette production, according to statistics of the State Bank of Pakistan, swelled 71% from 11.48 billion sticks to 19.66 billion sticks in July-October 2017.

COMMENTS (2)

baignabil . | 6 years ago | Reply actually pakistan should do what saudia and uae did. they should introduce sin tax. cigarettes, soft drinks and energy drinks prices should be doubled in case of pakistan trippled. people are not going to stop smoking or de involve themself from these sins. so why not make more money for tax.

Dr Asjad Iqbal | 6 years ago | Reply Somehow it seems that the government is increasing taxes on cigarettes to increase revenues. The producers of cigarettes produce them for ‘revenue’’. Concern for the health of the people is secondary. There should be a systematic media campaign to encourage young people not to start smoking. The evil should be nipped in the bud. Once a person is addicted it is very difficult to reverse. Parents are the best people to discourage their children from smoking. Graphic images on cigarette packs don’t work. My sister learned her 14 year old son had started smoking. She sat wit him for three hours and gave him a talk. He has stopped smoking. Children trust that parents say things in their best interest.

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