Nadeem Tanoli
Islamabad: Pakistan collected around Rs 1.92 trillion in sales tax and Federal Excise Duty from the tobacco sector across the financial years listed from 2015 to 16 through 2025 to 26, but a government reply to the Senate did not provide yearwise figures for Tobacco Development Cess or explain how much money was released to Khyber Pakhtunkhwa and tobacco growing district Swabi.
The details were shared by Finance Minister Muhammad Aurangzeb in response to a question by Senator Mashal Azam, who sought a 10 year record of tobacco taxes, the province’s share or royalty, actual payments and reasons for any delays, reductions or non release of funds.
According to the reply, total sales tax collection from tobacco manufacturers stood at Rs 432.12 billion, while Federal Excise Duty collection reached Rs 1.486 trillion. The figures cover domestic supplies and imports as declared in sales tax and excise returns. The table lists 11 financial years, from 2015 to 16 to 2025 to 26, although the question sought details for the last 10 years.
Combined sales tax and excise duty collection was about Rs 116.56 billion in 2015 to 16, falling to Rs 84.73 billion in 2016 to 17. It rose to Rs 89.53 billion in 2017 to 18 and Rs 117 billion in 2018 to 19, before reaching Rs 115.55 billion in 2019 to 20.
The combined collection then increased to Rs 138.38 billion in 2020 to 21, Rs 152.35 billion in 2021 to 22 and Rs 183.21 billion in 2022 to 23. It jumped to Rs 302.57 billion in 2023 to 24, stood at Rs 289.54 billion in 2024 to 25 and reached around Rs 329.11 billion in 2025 to 26.
In the latest financial year, sales tax collection totalled Rs 77.15 billion, including Rs 43.194 billion from domestic supplies and Rs 33.956 billion from imports. Federal Excise Duty collection reached Rs 251.958 billion. Of this, Rs 89.071 billion came from domestic supplies and Rs 162.887 billion from imports.
The figures show a sharp change in the source of excise duty collection. Domestic excise duty fell from Rs 236.333 billion in 2023 to 24 to Rs 121.574 billion in 2024 to 25 and Rs 89.071 billion in 2025 to 26. Meanwhile, excise duty collected on imports rose significantly. The reply did not explain the reasons for this change.
The government said tobacco products are subject to sales tax at 18 per cent. Federal Excise Duty is charged at different rates according to retail price. The current stated rates are Rs 16,500 per 1,000 cigarettes for Tier I and Rs 5,050 per 1,000 cigarettes for Tier II.
However, the main question about Tobacco Development Cess and the money due to Khyber Pakhtunkhwa, particularly Swabi, remained unanswered in the figures provided. The reply said information on Tobacco Cess was a provincial subject and should be provided by the Khyber Pakhtunkhwa government. It added that royalty allocation fell within the federal government’s domain.
