ISLAMABAD: Vaping and smoking will become costlier than ever before, as the federal government has announced to increase the prices of e-cigarettes and conventional cigarettes.
The federal government proposed an increase in the prices of e-cigarettes in Budget 2017-18. The government has also proposed an increase in excise duty on imported cigarettes.
Electric cigarettes are currently not properly classified and, therefore, are subject to only 3 percent customs duty. Keeping in view their harmful effects on health, it is proposed that e-cigarettes may be properly classified with 20 percent customs duty.
Moreover, the rate of duty has been enhanced on the existing tiers of cigarettes to discourage cigarette smoking and to curb the declining revenue from this sector, he said.
The minister also said that a new tier is also being introduced this year to document and curb the menace of illicit trade of substandard/low priced cigarettes.
“Production and sale of illicit and non-duty paid cigarettes has assumed threatening proportions. Non-duty paid cigarettes not only cause loss of revenue but also pose a serious health risk due to lack of quality controls and regulatory oversight,” the finance minister said in his speech.
He further informed the House that the government was taking several initiatives to curb the sale and production of illicit tobacco products. “In order to document the sale of tobacco so as to get information regarding the persons engaged in production of cigarettes and the extent of their production, it is proposed that the Pakistan Tobacco Board or its contractor for collection of tobacco cess shall collect withholding tax at the rate of 5 percent at the time of collecting cess on tobacco.”
“Pakistan is one of the countries where cigarette consumption is increasing with the passage of every year, as according to WHO data of 2014, every adult consumes 510 cigarettes on average every year, which is alarming,” the finance minister said.
He further informed the lawmakers that earlier this month, Minister for National Health Services Saira Afzal Tarar had suggested increasing federal excise duty (FED) on the lower slab of all brands of cigarettes to Rs 44 per pack of 20 cigarettes in Budget 2017-18 in a bid to reduce tobacco consumption, as tobacco was a cause of thousands of deaths (approximately 108,800) annually in Pakistan.