ISLAMABAD – Vaping in Pakistan is set to become more expensive after Federal Board of Revenue (FBR) brought e-liquids under the Federal Excise Duty (FED) for the first time, imposing massive Rs16,500 per kilogram tax that is expected to push up prices of e-cigarettes and vaping products.
The new levy has been introduced through amendments to the Federal Excise Act, 2005 amid shift in the country’s taxation policy towards vaping products, as it also gains momentum to oppose vaping in youth.
Under revised framework, manufacturers, importers, distributors, and suppliers dealing in e-liquids will be required to comply with the newly enforced excise duty provisions. The amendments also revise the FED structure for several other taxable products.
The move is expected to drive up the retail prices of e-cigarettes and vaping products across Pakistan, with industry stakeholders warning that the higher tax burden could dampen consumer demand and put additional pressure on businesses operating in the sector. Retailers and importers are already assessing the financial impact of the new taxation regime.
The latest tax measure comes against the backdrop of an ongoing legal battle over the vaping industry in Punjab.
Last year, vape retailers got relief by court after shops were sealed by provincial authorities during a crackdown. Justice Anwar Hussain issued the directive while hearing petitions filed by 74 vape dealers, including the retail chain Vape Mall, challenging the legality of the government’s enforcement action.
The court barred the provincial government from taking any further action against vape retailers until the pending appeal is decided.
During the proceedings, the provincial government’s legal representative failed to provide what the court considered a convincing legal basis for sealing the outlets. The court observed that the authorities had not established sufficient legal grounds to justify the action taken against the businesses.
Vape Shops to ‘reopen’ in Lahore as court stops action against e-cigarette, vaping
