'Health Tax' on tobacco and carbonated drinks

The Federal Cabinet has decided that Finance Bill for the next fiscal year will include measures to prevent illicit trade of tobacco and impose 'Health Tax' on tobacco and carbonated drinks. Sources said that the decision to this effect was taken by a meeting of the federal cabinet on May 28, 2019. The meeting decided that budget for 2019-20 will include measures to discourage tobacco use as well as illicit trade of cigarettes.

Official document reveals that the meeting presided over by the Prime Minister Imran Khan decided also made the decision that health tax on tobacco @Rs 10 on per pack of 20 cigarettes and on carbonated drink @Rs 1/ 20ml bottle through Finance Bill would be imposed.

The federal cabinet also decided that revenue generated through this health tax would be earmarked for the health sector development over and above its routine budgetary allocation. The meeting also decided that Finance Bill will also include measures to check illegal manufacturing and illicit trade of cigarettes and other tobacco products.

Ministry of National Health Services, Regulation and Coordination was instructed to present draft of inputs in this respect. The meeting also reviewed the presentation of the Finance Division on the budget strategy paper 2019-20 and approved Medium-Term Macroeconomic Framework.

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