During a news conference, Minister of Finance and Revenue Miftah Ismail announced that the Federal Government has decided to impose a new tax on cigarettes and tobacco worth Rs. 36 billion.
The gap left by the drop in retail tax from Rs. 42 billion to Rs. 27 billion has to be filled. An 18 billion rupee cigarette tax was proposed by Miftah Ismail. However, as stated by the Minister, the Federal Government chose to double it to Rs. 36 billion.
Miftah claims that the tax on tobacco has increased from Rs. 10 per kg to Rs. 380 per kg, a 3,800% rise. However, cigarettes would be subject to excise duty.
Miftah disclosed that the tax on tobacco would prove as a helping hand in regularizing the tobacco industry putting an end to the illegitimate production of cigarettes.
Other than that it would also acquire tobacco firms to pay sales tax which they had been eluding previously and to be a part of track and trace system of the government.
However, four new tobacco firms have been registered in the system
