In Pakistan, the Tobacco Industry has been subjected to Sales Tax at 17% on retail price. The Tobacco Industry is chargeable to Federal Excise Duty (FED) in term of Sr. No. 09 and 10 of First Schedule to the Federal Excide Act, 2005.
The FED on cigarette is imposed on multi-tier basis on the basis of retail price since June 12, 2013.
The rates of FED have been enhanced from time to time.
The details of FED imposed per thousand cigarettes from July 01, 2021;
Imported Cigarettes are subject to Sales Tax at 17%. The FED is chargeable at 65% of retail price (as prescribed in S. No. 9 of schedule whichever is higher) on imported cigarettes in terms of S. No. 8 to First Schedule to the Federal Excise Act, 2005.
The details of retail prices of the tobacco products, the retail prices of locally manufactured cigarettes as received from top tobacco companies of Pakistan;
All tobacco companies either local or multinational have equal chance to indicate their requirement as per their own financial resources. The Ministry of National Food Security and Research (NFS&R) and its attached department i.e. the Pakistan Tobacco Board (PTB) does not engage in any commercial or trading activity or providing any financial support or facility to any tobacco company engaged in tobacco business. The PTB provides equal opportunity to all players in the tobacco market as per law.
The Ministry of National Food Security and Research and its attached department i.e. the PTB has no role in allocating market share to any tobacco company either multinational or local. Every tobacco company in Pakistan, operates its business regarding sale purchase of tobacco or cigarette manufacturing as per their own resources.
The above information was shared with the Senate by the Minister for National Food Security and Research Tariq Bashir Cheema on October 11, 2022.