Islamabad: The federal government has decided to increase revenue by placing tobacco in the tax net.
The federal government has decided to take measures to prevent illegal tobacco trade in the budget and to increase locker revenue outside the tax net in the tobacco tax net to meet the IMF’s condition of increasing tax revenue.
Industry experts say curbing the illicit tobacco trade can significantly help meet the IMF’s requirement to increase the tax-to-GDP ratio.
It may be recalled that the IMF had recently urged the FBR to focus on generating additional revenue by imposing excise duty on locally produced cigarettes on a uniform basis irrespective of origin.
The price differential created by high taxes on legal cigarettes is causing consumers to switch to illegal cigarettes, causing the national exchequer to suffer an annual loss of Rs 310 billion in revenue.
