ISLAMABAD: The Federal Board of Revenue (FBR) has proposed a health tax on a pack of cigarettes.
A health tax of Rs. 10 on cigarettes has long been advocated by the anti-tobacco lobby to discourage smoking among the youth. Approval was granted for the tax by the cabinet in the last fiscal year.
The FBR official cited an example of the Workers Welfare Fund and said it was operated and run by the FBR. Giants in the tobacco sector are resisting the health tax.
According to the FBR, giants will not decrease consumption, but rather create a shift where customers will buy cigarettes in black and not from the formal sector.
The tobacco companies say this could cause a revenue loss to the national exchequer of Rs20 to Rs24 billion per year. Together with the increased share of an illicit product, the estimated losses to the national exchequer could go up to Rs100 billion, they added.
Legal points forwarded to the Ministry of Law were never considered before, so it is essential to seek advice before moving ahead, the FBR official said.