ISLAMABAD: The share of cigarettes in overall Federal Excise Duty (FED) collection has increased to 40 percent during 2022-23 as compared to 39.3 percent in 2021-22.

The FBR data further disclosed that the share of cement in the FED collection decreased to 18.7 percent in 2022-23 as compared to 24.6 percent in 2021-22. The share of the beverages (concentrates) in total FED collection increased from 7.7 percent in 2021-22 to 9.6 percent in 2022-23. The share of travel by air in total FED collection has increased to 4.9 percent in 2022-23 as compared to 3 percent in 2021-22.

The data of the FED compiled by the Federal Board of Revenue (FBR) revealed that the net collection from the FED increased by 15.4 percent during 2022-23. In absolute terms this increase translates into Rs. 49.1 billion additional FED collected as compared to 2021-22.

Despite the increase, the share of FED in total FBR collection remained unchanged at 5.2 percent as in the 2022-23, FBR report said.

Major sectors which contribute to FED revenues are cigarettes, cement, concentrates used in beverages/ foods, services. All the major sectors showed a positive growth in 2022-23 except cement, which recorded a negative growth.

The increase in major items like cigarettes, concentrates, and aerated water can be attributed to both inflation and increase in duty rates. The increase in FED collection from air travel is the result of increase in the duty rates on air travel combined with post-Covid easing of restrictions on air travel. The share of the top ten sectors is about 94 percent, as evident from the data. The cigarette is the top contributor with 39.9 percent share, followed by cement with 18.7 percent and concentrates 9.6 percent share, FBR added.

Copyright Business Recorder, 2023