Islamabad, June 12, 2024 – The Federal Board of Revenue (FBR) has unveiled the salient features of the Federal Excise Duty (FED) measures included in the Finance Bill for the fiscal year 2024-25.
These proposed budgetary measures are aimed at enhancing revenue generation and regulating various sectors of the economy.
Key Provisions of FED in Finance Bill 2024
1. Imposition of FED on Acetate Tow:
The FBR has proposed an imposition of FED on acetate tow at a rate of Rs. 44,000 per metric ton. This measure is likely aimed at generating additional revenue from materials used in cigarette production.
2. FED on Nicotine Pouches:
Nicotine pouches will be subjected to an FED of Rs. 1200 per kilogram. This is part of the broader initiative to tax tobacco and related products more heavily.
3. Enhancement of FED on E-Liquids:
The FBR has also proposed an increase in the FED on e-liquids used in electronic cigarettes, aiming to further regulate and generate revenue from the growing market of vaping products.
4. FED on Sugar Supply:
A new FED of Rs. 15 per kilogram is proposed on the supply of sugar to manufacturers. This measure is expected to impact the cost structure of sugar-based products.
5. Increased FED on Cement:
The FED rate on cement is proposed to be increased from Rs. 2 per kilogram to Rs. 3 per kilogram. This hike is aimed at increasing revenue from the construction sector.
6. FED on Real Estate Transactions:
An FED of 5% will be imposed on commercial properties and the first sale of residential properties. This new duty is aimed at tapping into the real estate market for additional revenue.
7. Enhanced FED on Filter Rods:
The rate of FED on filter rods, used in cigarette manufacturing, is proposed to be significantly increased from Rs. 1500 per kilogram to Rs. 80,000 per kilogram.
8. Power to Seal Retailers Selling Illicit Cigarettes:
The FBR will be granted the authority to seal business premises of retailers found selling illicit cigarettes. This measure aims to curb the sale of non-compliant tobacco products.
9. FED Exemption for Diplomats:
Exemption from FED is proposed for diplomats and diplomatic missions, aligning with international diplomatic norms.
10. Increased Price Threshold for Local Cigarettes:
The price threshold for locally manufactured cigarettes will be increased from Rs. 9,000 to Rs. 12,500 per thousand cigarettes. This adjustment reflects changes in the market and aims to ensure proper taxation of higher-priced cigarette brands.
These measures in the Finance Bill 2024 reflect the government’s strategy to increase tax revenues, regulate industries more effectively, and ensure compliance with federal tax laws.