Revised advance tax rates on imported mobile phones take effect from July 1, 2026, with concessional treatment retained for CKD and SKD imports.
ISLAMABAD: The Federal Board of Revenue (FBR) has notified the advance income tax rates applicable to the import of mobile phones into Pakistan for Tax Year 2027, effective from July 1, 2026, following the release of the updated Income Tax Ordinance, 2001 incorporating amendments introduced through the Finance Act, 2026.
The revised rates prescribe different advance tax amounts based on the Cost and Freight (C&F) value of imported mobile phones and whether the devices are imported as Completely Built Units (CBU) or in Completely Knocked Down (CKD) or Semi Knocked Down (SKD) condition.
Advance tax rates based on C&F value
Under the updated provisions, mobile phones with a C&F value of up to US$30, excluding smartphones, will attract an advance income tax of Rs70 when imported as Completely Built Units, while no advance tax will apply to CKD or SKD imports.
For mobile phones with a C&F value exceeding US$30 but not exceeding US$100, including smartphones valued up to US$100, the advance tax has been fixed at Rs100 for CBU imports, with no tax on CKD or SKD imports.
Similarly, mobile phones valued above US$100 but not exceeding US$200 will continue to attract Rs100 advance tax on CBU imports, while CKD and SKD imports remain exempt.
For devices with a C&F value exceeding US$200 but not exceeding US$350, the advance tax has been prescribed at Rs970 for CBU imports, whereas CKD and SKD imports will continue to enjoy a zero rate.
Higher tax on premium smartphones
The FBR has maintained higher advance tax rates for premium mobile phones imported in Completely Built Unit (CBU) condition.
Mobile phones with a C&F value exceeding US$350 but not exceeding US$500 will attract an advance income tax of Rs5,000.
For handsets with a C&F value exceeding US$500, the advance tax has been fixed at Rs11,500, making them subject to the highest tax bracket under the revised schedule.
Concessional treatment for local assembly
To promote domestic manufacturing and assembly, the FBR has continued to provide preferential tax treatment for mobile phones imported in CKD and SKD condition.
No advance income tax will be charged on CKD or SKD imports of mobile phones with a C&F value of up to US$350.
For higher-value devices, the advance tax has been fixed at Rs3,000 for mobile phones valued between US$350 and US$500, while handsets with a C&F value exceeding US$500 will attract Rs5,200.
The concessional regime is intended to support Pakistan’s mobile phone assembly industry by lowering the tax burden on components and semi-assembled devices compared with fully built imported handsets.
Effective from Tax Year 2027
The notified advance tax rates form part of the updated Income Tax Ordinance, 2001, as amended through the Finance Act, 2026, and are applicable for Tax Year 2027 beginning July 1, 2026.
The FBR has directed customs authorities to apply the prescribed advance income tax rates at the time of import according to the C&F value of the mobile phone and whether it is imported as a Completely Built Unit or in CKD/SKD condition.