Federation can't levy health tax on tobacco consumption: FBR

The Federal Board of Revenue (FBR) said Tuesday that the health is a provincial subject and federation cannot levy health tax on tobacco consumption. According to the FBR's clarification issued here on Tuesday, the issue of Health levy on tobacco consumption stands resolved.

The FBR has issued a clarification about the imposition of health levy on tobacco consumption. The legal and constitutional experts hold the view that health is a provincial subject and Federation cannot levy health tax on tobacco consumption. As a result it was decided to enhance the Federal excise duty on cigarettes in order to discourage smoking. The Parliament through Finance Act 2019 abolished three tiered tax structure on cigarettes and also enhanced the FED significantly.

In the Budget Speech 2019-20, the then Revenue Minister clarified that Federal share of Federal Excise & Duty realized from tobacco sector will be preferably allocated to Ministry of National Health Services Regulations and Coordination. Resultantly issue of Health levy stands resolved.