budget 2020/2021

Senate recommends tobacco must be treated as crop, exempted from duty/taxes

Budget 2020-2021

ISLAMABAD: The Senate of Pakistan has recommended that tobacco must be treated as a crop and must be exempted from duty and taxes.

In its recommendations to Finance Bill 2020, the upper house recommended the National Assembly that tobacco must be treated as a crop like wheat, maize, sugarcane etc. and must be exempted from taxes/duties.

The taxes may be imposed on processed / manufactured tobacco products only.

It is recommended that Federal Excise Duty (FD) on cigarettes should be enhanced as per guidelines given by the World Health Organization (WHO) to bring the rates of FED at par with other countries in the region.

The Senate recommended that taxation rates on cigarettes by local concerns must be rationalized viz a viz tobacco products processed /manufactured by concerns owned by multinational companies. A lower tax rate/duties should be imposed on local products as opposed to international brands.

It is recommended that strict anti-smuggling measures must be adopted to prevent international brand cigarettes smuggling into/outside Pakistan.

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