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Retailers urge government to reconsider FED increase on cigarettes, request meeting

  • April 21, 2023

LAHORE-he All-Pakistan Central Union Pan-Cigarette Beverage Retailers has called the extraordinary increase in the Federal Excise Duty rate on cigarettes a threat to the survival of pan-cigarette retailers.

The retailers have requested Prime Minister Shehbaz Sharif to take notice of the matter and find a solution to the serious effects on retailers due to the high cost of legal cigarettes.

In a letter sent to Prime Minister Shehbaz Sharif, the All Pakistan Central Union Pan-Cigarette Beverage Retailers highlighted the negative impact of the extraordinary increase in the federal excise duty on legal cigarettes on pan-cigarette retailers.

The union president, Haji Muhammad Mubeen Yusuf Butt, informed Prime Minister Shehbaz Sharif about the difficulties faced by retailers due to the increase in legal cigarette prices after the FED hike.

The letter stated that on February 15, taxes of Rs 60 billion were imposed on the cigarette industry through the mini-budget, and the tax rate on cigarettes was increased from 200 percent to 400 percent. The move doubled the price of cigarettes, but consumers did not accept the increase.

It has been observed that the trend of smoking has not declined. However, due to inflation and a reduction in purchasing power, consumers are increasingly attracted to cheap illegal cigarettes.

Haji Muhammad Mubeen Yusuf Butt said that after the increase in FED, the sales of big brands are decreasing, making it impossible to meet the tax collection targets from the cigarette industry.

The letter further stated that more than 7 lakh retailers selling pan-cigarettes across the country have faced a crisis due to the extraordinary increase in federal excise duty on cigarettes, which is likely to affect the livelihood of 5 lakh people.

The increase in federal excise duty has almost doubled the price of legal cigarettes, causing consumers to switch to cheaper cigarettes, which are mostly illegal due to tax evasion, the letter stated.

This situation is difficult for retailers who sell illegal cigarettes to maintain their revenue. This makes the retailers guilty of breaking the law.

The All Pakistan Central Union Pan-Cigarette Beverage Retailers has appealed to Prime Minister Shehbaz Sharif to take immediate notice of this situation and convene a meeting of stakeholders. This will help ensure that in this era of severe inflation, the stoves of 7 lakh retailers’ homes are not cold, and their families can be saved from possible starvation.

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