According to the amended Federal Excise Act, 2005, there is no change in the highest slab of excise duty on cigarette brands consumed by rich class of the society. The excise duty would remain 63 percent of the retail price on expensive brands of cigarettes. The excise duty has been increased on the remaining lower brands of cigarettes.
The FED would be 63 percent of the retail price on the locally produced cigarettes if their retail price exceeds Rs 17 per ten cigarettes.
The excise duty would be Rs 3.54 per ten cigarettes plus 69 percent per incremental rupee or part thereof on locally produced cigarettes if their retail price exceeds Rs 8.29 per ten cigarettes, but does not exceed Rs 17 per ten cigarettes.
The FED would be Rs 3.54 per ten cigarettes on locally produced cigarettes, if their retail price does not exceed Rs 8.29 per ten cigarettes.When contacted, analyst opined that the government has not increased the excise duty on the most expensive brands of cigarettes, being consumed by the rich class for the last many years. However, there is a gradual raise in excise duty on comparatively lower brands of cigarettes.
The Ministry of Health and many NGOs seemed to be unaware about minimum raise in excise duty on expensive brands of cigarettes.
They said that the government had established a special cell of Framework Convention Tobacco Control (FCTC) in the Ministry of Health to check consumption of tobacco among the masses by taking effective measures like raise in excise duty on the commodity. However, the role of the FCTC Cell is yet to be determined in view of existing trends in excise duty raise on only low quality brands of cigarettes.
Analyst said that it is a global practice that substantial increase in excise duty on cigarettes helps in decreasing overall consumption of the commodity. This uniform duty increase should be applicable on all brands of cigarettes being manufactured in Pakistan.
Following is the text of the Ordinance: President Asif Ali Zardari on Saturday promulgated the Federal Excise (Amendment) Ordinance, 2009, further amending the Federal Excise Act, 2005. The Ordinance promulgated by the President in exercise of the powers conferred by clause (1) of Article 89 of the Constitution and may be called as the Federal Excise (Amendment) Ordinance, 2009, will come into force at once.
Following is the text of the Ordinance:-
Ordinance No. III of 2009 An Ordinance further to amend the Federal Excise Act, 2005
Whereas it is expedient further to amend the Federal Excise Act, 2005, for the purposes hereinafter appearing;And whereas the National Assembly is not in session and the President is satisfied that circumstances exist which render it necessary to take immediate action;
Now, therefore, in exercise of the powers conferred by clause (I) of Article 89 of the Constitution of the Islamic Republic of Pakistan, the President is pleased to make and promulgate the following Ordinance:
1. Short title and commencement.- (I) This Ordinance may be called the Federal Excise (Amendment) Ordinance, 2009.
(2) It shall come into force at once.
2. Amendment of First Schedule to the Federal Excise Act, 2005.-In the Federal Excise Act, 2005, in the First Schedule, in Table 1, for Sr. Nos. 9, 10 and 11 in column 1 and the entries relating thereto in columns (2), (3), (4), the following Sr. Nos. and the entries relating thereto shall be substituted, namely:-
9. Locally Produced cigarettes if their retail exceeds seventeen rupees per ten cigarettes 24.02 Sixty-three percent of the retail price.
10. Locally produced cigarettes if their retail price exceeds eight rupees and twenty-nine paisas per ten cigarettes but does not exceed seventeen rupees per ten cigarettes. 24.02 Three rupees and fifty-four paisas per ten cigarettes plus sixty-nine percent per incremental rupee or part thereof.
11. Locally produced cigarettes if their retail price does not exceed eight rupees and twenty-nine paisas per ten cigarettes. 24.04 Three rupees and fifty-four paisas per ten cigarettes.