Government Plans to Introduce New Duty on Nicotine Pouches and E-Cigarettes

The federal government is set to impose federal excise duty (FED) on Nicotine pouches and e-cigarettes in the Finance Bill 2024, which will be presented on Wednesday, June 12. Currently, there is no FED on Nicotine pouches.

The tax rate on e-cigarettes is expected to be aligned with that of imported cigarettes. This move is estimated to generate significant revenue for the government.

In addition to imposing new duties, the government plans to maintain the existing FED rates on cigarettes. It also intends to intensify enforcement measures to combat the illicit trade of cigarettes and increase fines and penalties in the upcoming budget (2024-25).

Furthermore, the government is likely to set a tax collection target of Rs. 12.9 trillion for the Federal Board of Revenue (FBR) for 2024-25, compared to Rs. 9.4 trillion for the previous fiscal year, representing a substantial increase of Rs. 3.5 trillion.

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