Pakistan Government Considers Increasing Federal Excise Duty (FED) Tax Upcoming Budget
The Government of Pakistan is reportedly reviewing multiple options to increase the Federal Excise Duty (FED) in the upcoming budget for the next fiscal year. The move is aimed at boosting revenue and meeting targets set by the International Monetary Fund (IMF).
Why Increase the FED?
Due to rising budget deficits and strict loan conditions, the government is under pressure to increase its revenue. One of the easiest and most direct ways to do this is by raising indirect taxes like the FED, which is charged on items such as cigarettes, soft drinks, luxury goods, and vehicles.
A senior official said, “We are exploring various FED-related proposals that can bring in more revenue without putting too much burden on essential goods.”
Sectors Likely to Be Affected
Sources suggest that the following sectors could see an increase in FED:
- Tobacco and Cigarettes
- Sugary Drinks and Beverages
- Luxury and Imported Items
- Vehicles above a certain engine capacity
While final decisions have not yet been made, discussions are ongoing between the Federal Board of Revenue (FBR) and the Ministry of Finance.
Public Concerns
Experts warn that increasing the FED may result in higher prices for several consumer goods. This could further increase inflation, which is already a concern for the general public. However, the government is likely to avoid applying higher FED on basic or essential items.
Conclusion
The increase in Federal Excise Duty is part of the government’s broader strategy to strengthen its financial position. Final announcements will likely be made in the federal budget presentation expected in June.
