ISLAMABAD: Pakistan collected around Rs1.92 trillion in sales tax and Federal Excise Duty from the tobacco sector over the financial years listed from 2015-16 to 2025-26, but a government reply submitted to the Senate did not provide year-wise figures for Tobacco Development Cess or clarify how much money was released to Khyber Pakhtunkhwa and the tobacco-growing district of Swabi.
The details were shared by Finance Minister Muhammad Aurangzeb in response to a question by Senator Mashal Azam, who had sought a 10-year record of tobacco taxes, the province’s share or royalty, actual payments, and reasons for any delay, reduction or non-release of funds.
According to the reply, total sales tax collection from tobacco manufacturers stood at Rs432.12 billion, while Federal Excise Duty collection reached Rs1.486 trillion. The figures covered domestic supplies and imports as declared in sales tax and excise returns.
The table provided in the reply listed 11 financial years, from 2015-16 to 2025-26, although the question had sought details for the last 10 years.
Combined sales tax and excise duty collection stood at about Rs116.56 billion in 2015-16, falling to Rs84.73 billion in 2016-17. It then rose to Rs89.53 billion in 2017-18 and Rs117 billion in 2018-19, before standing at Rs115.55 billion in 2019-20.
The combined collection increased to Rs138.38 billion in 2020-21, Rs152.35 billion in 2021-22 and Rs183.21 billion in 2022-23. It jumped to Rs302.57 billion in 2023-24, stood at Rs289.54 billion in 2024-25 and reached around Rs329.11 billion in 2025-26.
In the latest financial year, sales tax collection totalled Rs77.15 billion, including Rs43.194 billion from domestic supplies and Rs33.956 billion from imports. Federal Excise Duty collection reached Rs251.958 billion, of which Rs89.071 billion came from domestic supplies and Rs162.887 billion from imports.
The figures also showed a sharp change in the source of excise duty collection. Domestic excise duty fell from Rs236.333 billion in 2023-24 to Rs121.574 billion in 2024-25 and Rs89.071 billion in 2025-26. Meanwhile, excise duty collected on imports rose significantly. The reply did not explain the reasons for this shift.
The government said tobacco products are subject to sales tax at 18 per cent. Federal Excise Duty is charged at different rates according to retail price. The current stated rates are Rs16,500 per 1,000 cigarettes for Tier I and Rs5,050 per 1,000 cigarettes for Tier II.
However, the key part of Senator Mashal Azam’s question regarding Tobacco Development Cess and the amount due to Khyber Pakhtunkhwa, particularly Swabi, remained unanswered in the figures provided.
The reply said information on Tobacco Cess was a provincial subject and should be provided by the Khyber Pakhtunkhwa government. It added that royalty allocation fell within the federal government’s domain.
The response did not specify the total amount released to Khyber Pakhtunkhwa, nor did it state the reasons for any delay, reduction or non-release of funds.
