The government has revised taxation on e-cigarette products by increasing the Federal Excise Duty (FED) on vaping liquids from Rs10,000 per kilogram to Rs16,500 per kilogram in the latest budget measures.

At the same time, authorities have removed the earlier retail price-based tax of up to 65%, which had been applied under the previous system.

Officials said the old structure created pricing distortions and encouraged under-reporting of actual retail values, making tax collection less efficient. The new fixed-duty model is intended to simplify the taxation framework and improve compliance in a rapidly growing vaping market.

The adjustment is part of broader efforts to streamline excise duties on tobacco-related and alternative nicotine products, ensuring a more uniform and predictable tax regime.