The Federal Board of Revenue (FBR) is set to introduce significant changes in Pakistan’s mobile phone duty and tax structure, aiming to rationalize rates and ease the financial burden on consumers.
The FBR is drafting a proposal for the National Assembly Standing Committee on Finance to review taxation on imported and locally assembled mobile phones. Cellular Mobile Operators (CMOs) have requested the withdrawal of regulatory duties on telecom power equipment not manufactured locally, along with rationalization of duties on other telecom equipment. They also recommended excluding telecom services from the retail price list, as these services do not directly sell imported goods.
According to FBR sources, tax rates on mobile phone imports are under review, and consultations with the Pakistan Telecommunication Authority (PTA) will ensure alignment with market realities. Last fiscal year (2024-25), the FBR collected Rs82 billion in taxes on mobile phone imports, with Rs18 billion coming from high-end smartphones. Currently, a five percent duty applies to mobile phones imported in CKD/SKD kits for local assembly, with some locally assembled phones priced from Rs15,000.
Tax authorities noted that any valuation exceeding market prices will be adjusted. With average smartphone prices declining, the FBR plans to work alongside the Ministry of IT to adjust taxes proportionately. The Ninth Schedule of the Sales Tax Act governs mobile phone taxation in Pakistan.
Members of the National Assembly Standing Committee on Finance criticized “excessive taxes” that have made even mid-range smartphones unaffordable. They emphasized that smartphones are now a basic necessity rather than a luxury and urged the FBR to reduce duties previously justified by Pakistan’s IMF program obligations.
Standing Committee Chairman Syed Naveed Qamar instructed the FBR and the Tax Policy Office to revisit prevailing tax rates under personal baggage and registration systems. PTA officials clarified that they do not collect taxes directly, with 94 percent of smartphones in Pakistan locally assembled and only 6 percent — mainly premium models like Apple — imported.
The proposed FBR reforms are expected to make mobile phones more accessible to ordinary citizens while supporting local assembly and manufacturing initiatives.