ISLAMABAD: The Federal Board of Revenue (FBR) is working on a comprehensive plan to rationalise duties and taxes on the import of mobile phones, aiming to address concerns over high levies that have made smartphones increasingly unaffordable.
According to sources, the FBR is drafting a proposal for submission to the National Assembly Standing Committee on Finance. As part of the process, the tax authority will also hold consultations with the Pakistan Telecommunication Authority (PTA).
Cellular Mobile Operators (CMOs) have urged the FBR to withdraw regulatory duties on telecom power equipment that is not manufactured locally and to rationalise duties on other telecom equipment. They have further argued that the telecom services sector should be excluded from the retail price list, as operators do not import goods for direct sale to consumers.
FBR officials told that tax rates on imported mobile phones require rationalisation. During fiscal year 2024-25, the FBR collected Rs82 billion in taxes from mobile phone imports, including Rs18 billion from high-end smartphones—around 23 to 24 percent of the total collection.
Currently, a five percent duty applies to mobile phones imported in CKD/SKD kit form for local assembly. Several local assembly plants are producing smartphones priced from around Rs15,000. Tax authorities noted that if import valuations are found to be above prevailing market prices, they would be revised accordingly.
Officials also pointed out that average smartphone prices have recently declined, suggesting that the FBR could work with the Ministry of IT to align taxes with actual market trends. Mobile phone taxation is governed under the Ninth Schedule of the Sales Tax Act.
Members of the National Assembly Standing Committee on Finance have strongly criticised what they termed “excessive taxes,” arguing that high duties have pushed even mid-range smartphones out of reach for ordinary consumers. They stressed that smartphones are no longer a luxury but a basic necessity, adding that the justification of Pakistan being “under an IMF programme” could not be used indefinitely to maintain heavy taxation.
In a recent meeting, the committee directed the FBR to prepare a detailed report on reducing taxes on smartphones. Committee Chairman Syed Naveed Qamar also advised the FBR and the Tax Policy Office to review tax rates applicable to mobile phone imports under the personal baggage and registration regime.
During the same meeting, PTA representatives clarified that the authority does not impose any direct taxes, stating that all duties are collected by the FBR. The PTA chairman informed the committee that around 94 percent of smartphones used in Pakistan are locally assembled, with only six percent—mainly high-end models—being imported. Tax officials added that, apart from Apple, all major smartphone brands are now manufactured in Pakistan.
