FBR issues clarification regarding imposition of health tax on tobacco

ISLAMABAD: Federal Board of Revenue (FBR) has issued a clarification on a news item appeared in some section of press about the imposition of health levy on tobacco consumption.

According to a press release issued by FBR, the legal and constitutional experts hold the view that health is a provincial subject and Federation cannot levy health tax on tobacco consumption. As a result, it was decided to enhance the Federal excise duty on cigarettes in order to discourage smoking.

The Parliament through Finance Act 2019 abolished three-tiered tax structure on cigarettes and also enhanced the FED significantly. In the Budget Speech 2019-20, the then Revenue Minister clarified that Federal share of Federal Excise & Duty realized from tobacco sector will be preferably allocated to Ministry of National Health Services Regulations and Coordination,” reads a press release.

Resultantly issue of Health levy stands resolved, added statement by FBR.

Over 15 million people in Pakistan use tobacco and around 1,60,000 people in the country died of the causes related to tobacco smoking, according to a report.

Tobacco use is a major cause of non-communicable diseases which include 15 types of cancers, health reports said.

The government had earlier announced to impose a sin tax on smokers and the amount collected from the tax will be spent on health sector.