ISLAMABAD – The federal government has announced a significant increase in the Federal Excise Duty (FED) on e-liquids used in electronic cigarettes. The decision was introduced as part of the latest budget measures aimed at improving tax collection and regulating the growing nicotine products market.
Under the new policy, the FED on e-liquids has been increased from Rs10,000 per kilogram to Rs16,500 per kilogram. The government believes the revised tax structure will generate higher revenue while simplifying the taxation process for manufacturers and importers.
The change directly affects products associated with E-Cigarette Flavors, a market that has expanded rapidly in recent years. Demand for electronic cigarettes and flavored vaping products has increased, particularly among urban youth and young adults.
Previously, e-cigarette products were taxed through a dual system. This included a fixed excise duty and a retail-price-based tariff that could reach up to 65 percent. Authorities stated that the old structure created pricing complications and encouraged under-reporting of product values.
As part of the new reforms, the government has removed the retail-price-based tariff. The revised approach introduces a fixed duty system, which officials say will make tax collection easier and more transparent.
The taxation changes are expected to impact the pricing of products linked to E-Cigarette Flavors. Industry observers believe businesses may adjust retail prices to account for the higher tax burden. However, the government maintains that the move is necessary to ensure fair taxation across nicotine-related products.
Officials also said the new policy aligns taxation on vaping products more closely with traditional tobacco products. The goal is to create a more uniform excise framework across the sector.
The electronic cigarette market has experienced steady growth over the past few years. Many consumers have turned to vaping products as alternatives to conventional cigarettes. This trend has contributed to the increasing popularity of various E-Cigarette Flavors available in the market.
The government views the sector as an important source of tax revenue due to its rapid expansion. By replacing the previous tax model with a fixed FED regime, authorities hope to reduce loopholes and improve compliance.
In other news read more about Pakistan Becomes World’s Most Polluted Country in 2025 Report
The latest budget measures reflect broader efforts to reform the taxation system and increase government revenues. Officials expect the revised policy on E-Cigarette Flavors and e-liquids to support these objectives while creating a simpler and more consistent tax structure for nicotine products.
