Health
Government to Impose Federal Excise Duty on Nicotine Pouches
Federal government is poised to impose federal excise duty (FED) on Nicotine pouches and e-cigarettes as part of the Finance Bill 2024, scheduled for unveiling on Wednesday (June 12).
Currently, Nicotine pouches are not subject to FED, but the proposed measure aims to align their taxation with other tobacco-related products.
Additionally, the tax rate on e-cigarettes is set to be brought in line with that of imported cigarettes, a move expected to level the playing field in terms of taxation.
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The introduction of FED on Nicotine pouches and e-cigarettes is projected to yield substantial revenue for the government, with estimates suggesting it could generate billions in additional funds.
Despite the imposition of new taxes on these products, the existing rates of FED on cigarettes will remain unchanged, ensuring consistency in the taxation regime for tobacco products.
Furthermore, the government plans to ramp up enforcement measures to combat the illicit trade of cigarettes, with fines and penalties set to be significantly increased as part of the budget (2024-25).
In a significant shift, the federal government is also set to announce a substantial increase in the tax collection target for the Federal Board of Revenue (FBR) for the fiscal year 2024-25.
The proposed target stands at Rs. 12.9 trillion, marking a significant rise from the previous fiscal year’s target of Rs. 9.4 trillion.
This ambitious target reflects the government’s commitment to enhancing revenue collection and ensuring fiscal sustainability.
As the Finance Bill 2024 is poised to introduce key taxation measures and revenue targets, stakeholders across various sectors are closely monitoring developments, anticipating the implications for businesses and consumers alike.
