As per the Federal Government decision an Rs. 36 billion new tax on cigarettes and tobacco Minister of Finance and Revenue, Miftah Ismail confirmed during a press conference.
In order to fill-up the gap happened from the reduction in retail tax from Rs. 42 billion to Rs. 27 billion. Miftah Ismail recommended a tax of Rs. 18 billion on tobacco. Though, Federal Government decided to make it twice to Rs. 36 billion, as per Minister.
According to Miftah, Rs. 10 per kg to Rs. 380 per kg, an increase of 3,800 percent imposed in contradiction of the tax on tobacco. Whereas, the tax imposed on cigarette would be under excise tax.
Miftah revealed that the tax on tobacco would prove as a helping hand in normalizing the tobacco industry putting an end to the unlawful production of cigarettes.
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Other than that it would also obtain tobacco firms to pay sales tax which they had been escaping formerly and to be a part of track and trace system of the government.
Though, four new tobacco firms have been registered in the system.