FBR clarifies imposition of Health Levy on tobacco consumption

• The clarification said that the legal and constitutional experts hold the view that health is a provincial subject and federation cannot levy health tax on tobacco consumption.
• 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.

ISLAMABAD: The Federal Board of Revenue (FBR) on Tuesday issued a clarification on a news item appeared in a section of press about the imposition of health levy on tobacco consumption.

The clarification said that 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 had clarified that federal share of Federal Excise Duty realized from tobacco sector would be preferably allocated to Ministry of National Health Services Regulations and Coordination.

Resultantly issue of health levy stands resolved and the information contained in the news item is incomplete, the clarification added.