250% Increasing tobacco price to help meet IMF requirements

In response to the government’s implementation of the Rs, cigarette manufacturers in Pakistan’s tobacco industry announced on Saturday significant price hikes of 250 percent per packet. This week, the 170 billion minibudget included a 150% increase in the rates of the Federal Excise Duty (FED) on cigarettes and a 17% increase in the sales tax rate.

All of the major brands of cigarettes, including Marlboro, Benson and Hedges, Gold Leaf, Capstan, Gold Flake, John Player, Dunhill, Embassy, and Capstan (in the Pall Mall version), have increased their retail prices, with the lowest price being Rs. 211, from the most expensive, is currently available for Rs. 522-525 in each packet

Right now, Marlboro Lights Pakistan costs Rs. 500 per pack after the manufacturer increased prices by Rs. in the latest rate revision. 240 in each packet According to ProPakistani, a Philip Morris Pakistan Limited spokesperson, the proposed unprecedented tax increase for tax-paying tobacco companies will effectively favor Pakistan’s already vast illicit cigarette industry. As has been the case in the past, the volumes will dramatically shift from the tax-paying sector to the non-tax-paying sector as a result, which will also result in significant shortfalls in government revenue.

Between the years 2019 and 2021: The FED’s increase was about 26%. The Federal Excise Duty (FED) on cigarettes has already increased by 25% in the current fiscal year 2022-23. The most recent announcement raises the FED on cigarettes by more than 150 percent, which will raise prices for adult consumers by more than 250 percent in Q1 2022.

Brands from the region that are registered with the Pakistan Tobacco Company Limited (PSX: Due to price increases driven by excise, PAKT) are now retailing at significantly higher rates. The current price of a pack of 20 Dunhill Switch cigarettes is Rs. 522.3, and it costs Rs at retailers. 525-530 for each pack

Dunhill Lights and Gold Leaf, two local favorites, now cost Rs. 479 and Rs. 483 each for each pack. Embassy, the go-to brand for the country’s hardworking laborers, now costs Rs. 212 in each packet

The complete list of PAKT rates that will go into effect on February 18, 2023 is as follows:

Brand Outer Rate (Rupees) Packet Rate (Rupees)
Dunhill 20HL, Switch 5222.91 522.29
Dunhill Lights, 20HL 4787.93 478.79
Benson & Hedges 20HL 4799.31 479.93
Bensen & Hedges Lights 4799.31 479.93
Gold Leaf 20HL 4826.47 482.65
Gold Leaf SPL, 20HL 4793.86 479.39
Capstan FT 20HL 2107.59 210.76
John Player 2101.64 210.16
Capstan by Pall Mall Original 20HL 2117.37 211.74
Gold Flake KS FT 20HL 2117.37 211.74
Gold Flake KS FT 20SC 2117.37 211.74
Embassy FT 20SS 2117.37 211.74

The supplementary finance bill, which also increased the sales tax on cigarettes, was recently introduced in parliament by Finance Minister Ishaq Dar.

It should be noted that the FED was informed on Tuesday by the Federal Board of Revenue (FBR) of a 153% increase in the price of expensive brands starting at Rs. 6.5 to Rs. 16,5 cents per cigarette From Rs., the per stick increase for less expensive brands is approximately 100 percent. 2.55 to Rs. 5.1. 250% Increasing tobacco price to help meet IMF requirements
Experts say that legitimate businesses are struggling to survive as a result of the recent FED hikes’ impact on sales. However, it is possible to observe that the tobacco industry has arguably raised prices beyond what was required by tax changes, despite the fact that the mini-budget taxes are substantial and expected to be sparse.

By absorbing the tax impact on cheaper products and raising consumer rates significantly above the cost of the tax increase on more expensive products, the industry has increased the per-packet price differentials.

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