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PHC suspends FBR’s third slab of cigarette brands

PHC suspends FBR’s third slab of cigarette brands

ISLAMABAD: Peshawar High Court (PHC) has suspended the third slab of cigarette brands introduced by Federal Board of Revenue (FBR) to control the illicit trade of cigarettes in the market.

The court provided the interim relief to the petitioner. The petitioner pleaded before the court that Pakistan is the only country identified by the researchers where tax on the high sellable brands has been reduced by 33 percent against the World health Organization (WHO) Framework Convention on Tobacco Control.

The petitioner said the recent changes brought in the Federal Excise Act 2005 and implemented in the Finance Act 2017 resulted in reduction in prices of brands instead of making them expensive.

In Pakistan, cigarette excise duties have been applied in two tiers before 2017. The first tier was for the cigarette which was expensive. The tax tier was based on the price of the cigarette; the brand with price more than Rs88 was paying Federal Excise Duty (FED) of Rs74 per pack, in second slab the brand less than Rs88 was paying Rs32.8 FED. In third slab, introduced by the government, the tax was reduced to Rs16 with the retail price below Rs58.5.