FBR Slaps 46% Hike in Duty for Locally Produced Cigarettes

Federal Board of Revenue (FBR) has notified up to 46% increase in Federal Excise Duty (FED) on locally produced cigarettes as announced by Finance Minister Asad Umar while presenting amendment to Finance Act, 2018 on Tuesday.

The increase in taxation on cigarettes will be:

  • for tier-1, the Federal Excise Duty (FED) has been increased from Rs 3,970 to Rs 4,500. The impact on price per 20-pack of cigarettes will be Rs 12.5,
  • for tier-ii, the price for a packet was increased by just 7 paisas,
  • for tier-iii, the impact on price per 20-pack of cigarettes will be Rs 11.

Following is the text of the SRO 1150(1)/2018 issued here on Tuesday:

The SRO stated that “ In exercise of the powers conferred by clause (b) of sub-section (3) of section 3 of the Federal Excise Act, 2005, the Federal Board of Revenue is pleased to direct that the excise duty shall be levied and collected on fixed basis at the rates specified in column (4) of the Table below on the goods specified in column (2) of the said Table falling under Pakistan Customs Tariff heading specified in column (3) thereof, namely:-


Retail Price Rate of Federal Excise Duty
Locally produced cigarettes if their on-pack printed retail price exceeds Rs 4500 per thousand cigarettes Rs 4500 per thousand Cigarettes
Locally produced cigarettes if their on-pack printed retail price exceeds Rs 2925 per thousand cigarettes but not exceed Rs 4500 per thousand cigarettes Rs 1840 per thousand Cigarettes
Locally produced cigarettes, if their on-pack printed retail price does not exceed Rs 2925 per thousand cigarettes. Rs 1250 per thousand Cigarettes


Posting of Inland Revenue officers at Tobacco Processing Factories

FBR has also made it mandatory for tax offices having jurisdiction to depute an officer of Inland Revenue at the premises of Green Leaf Threshing (GLT) unit for monitoring the processing and sale of un-manufactured tobacco sale.

The FBR on Tuesday issued SRO 1149(I)/2018 to amend Federal Excise Rules, 2015 and made it mandatory to monitor GLT units.


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It said that the commissioner having jurisdiction shall post officers of Inland Revenue at the premises of GLT units, whether working separately or as part of a cigarette manufacturing units, for monitoring the receipts, processing, wastage, storage, issue of un-manufactured tobacco for sale, transfer or self consumption. They shall also stamp and sign the tax invoice issued by the GLT units.

It would be the responsibility of GLT units to provide the officers for postings, with in-house accommodation and office space that can enable them to perform their duties in an efficient manner.

A GLT unit shall not sell un-manufactured tobacco to any person who is not on active taxpayers list.

  • Picture used in this post is ….. what can I say? Is it male smoking or female smoking or male dressed as female smoking?

  • This should have been increased by more than 100% or even 200%. Let the people who want to burn their money like this, pay more to the government.

    • So the government can burn the money as well? It’s not like they spend it on human welfare. They will use it for imported weapons for the military. They will spend it on financing terrorists. See this article for the state of human development in Pakistan: brecorder dot com/2018/09/17/440599/pakistans-hdi-horror-show/

      Also when you increase taxes you only encourage smuggling and informal businesses which don’t pay taxes at all and make unsafe products. That is because there is no law enforcement in Pakistan.

      • So spending on military might of your own country is a problem now? That’s a new low for a Pakistani citizen (assuming you’re one, irrespective of that name you chose for comment).
        Furthermore, smuggling may have been a thing of the past with corrupt government, but not the case now.

    • It’s a good business for smugglers as well. With all these taxes there is plenty of room for profit even after bribes to border security/customs.

  • Pushing smokers towards unsafe cigarettes from unregistered manufacturers. Also encouraging corruption among border security forces. This will only increase smuggling and border security and customs will enjoy bigger bribes.

  • Well F this system, smuggling is gonna get hotter for other cigarettes and still our government needs money for dams F Them.

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