The FBR recently issued a clarification stating that the long delayed health tax on cigarettes cannot be imposed as tobacco is a provincial subject. This is a strange explanation and one cannot buy it.
Withholding tax is being collected on education fees payable to schools/colleges above a certain threshold while education is also a provincial subject. Alternatively, the existing excise duty/sales tax being collected by the FBR on cigarettes can be increased to discourage smoking on health grounds which would serve the same purpose. Can the revenue board really be so naive or is it pressure from the powerful tobacco manufacturers that is playing on the FBR?
Kulsoom A Majeed
Karachi
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