ISLAMABAD: The Federal Board of Revenue (FBR) has proposed to raise the federal excise duty (FED) on imported and locally-assembled motor vehicles through the promulgation of the Tax Laws Amendment Ordinance to generate additional revenue in ‘mini-budget’.

Sources told Business Recorder here on Friday that the revenue generation measure under consideration is to rationalise the rates of the FED on imported and locally-assembled motor vehicles.

In this connection, working is being done by the FBR to finalise the revenue impact of the raise in the FED on vehicles, depending on the engine capacity of imported and locally-manufactured vehicles. However, the proposal has yet to be approved by the government.

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The FBR has drafted two proposals to raise the FED on cigarettes through the Presidential Ordinance. However, the proposals have not been finalised yet. The first proposal is to raise FED by Rs200 for the existing slabs of cigarettes. The second proposal is to raise the FED by Rs500 in both the existing tiers of cigarettes. The proposal is to add additional FED in the existing rates of the FED applicable for both slabs of cigarettes.

Presently, the rate of the FED for Tier-I (slab 1) is Rs6,500 per 1,000 cigarettes and the FED rate on Tier-II (slab-2) for Rs2,050 per 1,000 cigarettes.

From January 16, 2022, the FBR had revised upward the FED rates after the implementation of the Finance (Supplementary) Act, 2022.

Through S No 55, 55B, 55C and 55D of Table-1 of the First Schedule to the Federal Excise Act, 2005, the rates of FED on imported, locally-manufactured motorcars/SUVs, imported and locally-manufactured double cabin were provided respectively. In order to rationalise the existing rates of FED on vehicles last year, an increase in various slabs were made from January 16, 2022, through the Finance (Supplementary) Act, 2022.

Copyright Business Recorder, 2023