The share of cigarettes in overall federal excise duty (FED) collection has increased to nearly 40 percent in 2022-23 as compared to 39.3 percent in 2021-22.
On the other hand, 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 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 of 2022-23.
Major sectors that contribute to FED revenues are cigarettes, cement, concentrates used in beverages/foods, and services. All the major sectors showed positive growth in 2022-23 except cement which recorded a negative growth.
The increase in major items like cigarette concentrates, and aerated water can be attributed to both inflation and an increase in duty rates. The increase in FED collection from air travel is the result of an 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 with 9.6 percent share, FBR added.