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ISLAMABAD: Despite 200 percent increase in Federal Excise Duty (FED) on cigarettes, the Federal Board of Revenue (FBR) has collected Rs225.495 billion FED from cigarettes during 2024-25 against Rs 235.047 billion in 2023-24, showing a decrease of 4.1 percent. The FBR’s report issued on Thursday revealed that the share of cigarettes in overall FED collection decreased from 40.7 percent in 2023-24 to 29.4 percent in 2024-25, reflecting impact of growing illicit trade of cigarettes on national level. Net collection from the Federal Excise Duty (FED) surged by 32.8 percent, increasing from Rs. 577.4 billion in the previous financial year to Rs. 766.6 billion in current financial year. Consequently, the FED’s share in FBR’s overall tax collections increased from 6.2 percent to 6.5 percent. Illicit cigarettes’ dominance in market hits govt revenue Significant contributors to FED revenues include sectors such as cigarettes, cement, travel by air, concentrates for beverages/foods, aerated waters and motor cars. The FED target for the year was achieved to the extent of 101.0% of the given targets. Top fifteen sectors constitute 83.7 percent share in total FED collection in 2024-25. Cigarette is the top contributor with 29.4 percent share, followed by cement with 20.1 percent and Inland Travel By Air with 6.9 percent share during this period. Copyright Business Recorder, 2025
