Applicable duty, tax rates on mobile phones

Applicable rates of duty and tax on mobile phones have been unveiled for the payment at the import stage and collected by Pakistan Customs.

In a move to provide transparency and clarity for the import of mobile phones, Pakistan’s regulatory authorities have unveiled the applicable rates of duty and taxes. These rates will impact the cost of importing mobile devices into the country and are outlined within the Pakistan Customs Tariff (PCT) 8517.1219 for classification.

The structure of customs and regulatory duties, sales tax, and other levies is an important consideration for importers and consumers alike. It is essential to comprehend these rates to assess the financial implications of importing or purchasing mobile phones in Pakistan. Let’s delve into the details of the new rate structure.

Customs/ Regulatory Duty:

1. Rs. 250 per set: This rate applies to mobile phones with a Cost and Freight (C&F) value of up to $60.

2. 10 percent ad valorem of C&F value above $60 and up to $130: For mobile phones with a C&F value exceeding $60 but not exceeding $130, a customs duty of 10 percent ad valorem will be applied.

3. 20 percent ad valorem of C&F value above $130: If the C&F value of a mobile phone surpasses $130, a higher customs duty of 20 percent ad valorem will be levied.

Sales Tax (S.No.2 of the Ninth Schedule to the Sales Tax Act, 1990):

1. Low-priced: A sales tax of Rs. 650 per set will be applicable to mobile phones categorized as “low-priced.”

2. Medium-priced: Mobile phones falling into the “medium-priced” category will also be subject to a sales tax of Rs. 650 per set.

3. Smart or Satellite: For smartphones or satellite phones, a higher sales tax of Rs. 1500 per set will be imposed.

Advance Sales Tax:

A standard rate of 3 percent will be charged as an advance sales tax on mobile phones at the import stage.

Advance Income Tax:

1. 6 percent for filers: Filers, or individuals who have registered with the tax authorities, will be subject to an advance income tax rate of 6 percent when importing mobile phones.

2. 9 percent for non-filers: Non-filers, or those who have not registered with the tax authorities, will be charged at a higher rate of 9 percent for advance income tax on mobile phone imports.

Mobile Handset Levy (Finance Act, 2018):

The Mobile Handset Levy, as outlined in the Finance Act of 2018, is structured as follows:

1. Where the value, including duty/taxes, is Rs. 10,000 to 40,000: A levy of Rs. 1,000 per set will be applied.

2. Where the value, including duty/taxes, is Rs. 40,000 to Rs. 80,000: For mobile phones falling within this value range, a levy of Rs. 3,000 per set will be charged.

3. Where the value, including duty/taxes, exceeds Rs. 80,000: Mobile phones with a total value surpassing Rs. 80,000 will incur a higher levy of Rs. 5,000 per set.

These newly unveiled duty and tax rates will have implications for importers, consumers, and the mobile phone industry in Pakistan. Importers will need to factor in these charges when assessing the cost of bringing mobile devices into the country. Consumers, on the other hand, may experience varying price points based on the category of the mobile phone they wish to purchase.

The government’s approach to levying duties and taxes on mobile phones is designed to generate revenue and ensure that all parties involved, whether importers or consumers, contribute to the country’s tax base. It is also part of a broader strategy to regulate the import and sale of mobile devices in Pakistan, balancing the need for revenue generation with ensuring affordability for consumers. Understanding these rates is vital for making informed decisions in the mobile phone market.