Pakistan Raises Excise Duty on Cigarettes: Two-Tiered Rates Announced

The Federal Board of Revenue (FBR) has issued a notification announcing revised excise duty rates for locally produced cigarettes in Pakistan. These changes, effective immediately, aim to regulate the tobacco industry and potentially generate additional revenue for the government.

Key Points of the Notification:

  • Excise Duty Based on Retail Price: The new rates are structured based on the on-pack printed retail price of cigarettes, creating two distinct categories:
    • Cigarettes priced above 9,000 rupees per thousand will now be subject to an excise duty of 16,500 rupees per thousand.
    • Cigarettes priced at or below 9,000 rupees per thousand will incur an excise duty of 5,050 rupees per thousand.

Implications and Considerations:

  • Price Impact: The higher excise duties are likely to lead to increased prices for cigarettes, potentially discouraging consumption and promoting public health goals.
  • Industry Impact: Cigarette manufacturers may need to adjust their pricing strategies and production costs to adapt to the new regulations.
  • Revenue Generation: The government anticipates increased revenue from the higher excise duties, which could contribute to public spending in various sectors.
  • Compliance and Enforcement: The FBR will play a crucial role in ensuring that cigarette manufacturers adhere to the new rates and take necessary actions against non-compliance.

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