In an effort to generate additional revenue and bridge fiscal gaps, Pakistan has imposed a 25% sales tax on the import of mobile phones valued above $500 per piece, according to official sources.
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New rates of sales tax on mobile phones imposed through mini budget
ISLAMABAD: Federal Board of Revenue (FBR) has issued new rates of sales tax on mobile phones after implementation of the mini budget.
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Pakistan imports mobile phones worth Rs93 billion during seven months
Pakistan imports mobile phones worth Rs93 billion during first seven months (July – January) 2022-2023 amid challenging economic conditions.
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Pakistan imports mobile phones worth $363 million amid worst forex crisis
KARACHI: Pakistan has imported mobile phones worth $363 million during first half (July – December) of fiscal year 2022-2023 despite fact of worth foreign exchange crisis in the country.
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Tax rates on mobile phone, internet users during 2022-2023
KARACHI: The Federal Board of Revenue (FBR) has issued amended income tax law to notify the tax rates on users of mobile phones and internet during 2022-2023.
FBR issued Income Tax Ordinance, 2001 updated up to June 30, 2022 incorporating changes made through the Finance Act, 2022.
READ MORE: FBR launches campaign to ensure return filing by due date
The revenue body collects these taxes under Section 236 of the Income Tax Ordinance, 2001.
Under this section, in the case of telephone subscriber (other than mobile phone subscriber) where the amount of monthly bill exceeds Rs1,000, then the tax rate shall be 10 per cent of the exceeding amount of bill.
Similarly, in the case of subscriber of internet, mobile telephone and pre-paid internet or telephone card, the tax rate shall be 15 per cent of the amount of bill or sales price of internet pre-paid card or pre-paid telephone card or sale of units through any electronic medium or whatever form.
READ MORE: FBR promotes 56 Inland Revenue Officers to BS-17
According to the Section 236: Telephone and internet users.- (1) Advance tax at the rates specified in Division V Part IV of the First Schedule shall be collected on the amount of –
(a) telephone bill of a subscriber;
(b) prepaid cards for telephones;
(c) sale of units through any electronic medium or whatever form; and
(d) internet bill of a subscriber; and
(e) prepaid cards for internet.
(2) The person preparing the telephone or internet bill shall charge advance tax under sub-section (1) in the manner telephone or internet charges are charged.
READ MORE: FBR transfers six IRS officers of BS-19-20
(3) The person issuing or selling prepaid cards for telephones or internet shall collect advance tax under sub-section (1) from the purchasers at the time of issuance or sale of cards.
(3A) The person issuing or selling units through any electronic medium or whatever form shall collect advance tax under sub-section (1) from the purchaser at the time of issuance of sale of units.
(4) Advance tax under this section shall not be collected from Government, a foreign diplomat, a diplomatic mission in Pakistan, or a person who produces a certificate from the Commissioner that his income during the tax year is exempt from tax.
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Clearance of banned cars, phones allowed on 100% surcharge
ISLAMABAD: The government has allowed clearance of stuck up consignments of cars and mobile phones on payment of 100 per cent surcharge.
The ministry of commerce on Friday issued an office memorandum regarding prohibition / complete quantitative restrictions on import of non-essential and luxury items.
READ MORE: Pakistan lifts ban on import of cars, phones, luxury items
The ministry said that pursuant to the decision of federal cabinet on August 19, 2022, the federal government had allow release of all those consignments/shipments which had been imported in violation of SRO 598(I)/2022 dated May 19, 2022 and landed at any Pakistani port, subject to payment of surcharge.
The commerce ministry stated that to release those held up consignments, except Completely Built Unit (CBU) Auto, CBU phones and CBU home appliances, which landed after June 30, 2022 and on or before July 31, 2022 subject to payment of 25 per cent surcharge, and 35 per cent surcharge for those consignments which arrived after July 31, 2022.
READ MORE: 15% surcharge imposed for clearance of banned items
Similarly, to release held up consignments of CBU auto, CBU mobile phones and CBU home appliances, which landed after June 30, 2022 and on or before July 31, 2022 subject to payment of 100 per cent surcharge.
The ministry of commerce issued SRO 1562(I)/2022 for lifting the ban on luxury and non-essential items, including motor vehicles, mobile phones and home appliances.
The government on May 19, 2022 through a circular No. 598 (I)/2022 imposed the complete ban on import of such items in the wake of serious balance of payment crisis and to prevent fall in rupee value.
Despite the ban, the rupee fell to the historic low of Rs239.94 against the dollar on July 28, 2022.
It is worth mentioning that the foreign exchange reserves were drastically decreased despite imposition of ban on imported luxury items.
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Forbes China includes Xiaomi in best employers list
BEIJING: Xiaomi, a global technology leader and the third largest smartphone manufacturer has been named one of the top ten employers by Forbes China.
READ MORE: Xiaomi joins hands with SELECT for phone production
Xiaomi had 33,000 full-time employees worldwide at the end of last year. Other companies on the list include Schneider Electric, Hitachi Energy, Bank of China, etc.
Forbes China made its selection after surveying 70,000 people over three months. The survey, which involved multiple topics, was conducted by Forbes China and Russell Consulting Company.
READ MORE: Xiaomi plans assembly plant in Pakistan
Xiaomi was listed as one of the “World’s Best Employers 2021” by Forbes. It was also ranked No. 4 on the list of “China’s Most Attractive Employers” for engineering students by Universum.
Xiaomi prides itself on maintaining best practices for recruitment, employment, and employee benefits. According to the Company’s Environmental, Social, and Governance (ESG) Report last year, Xiaomi was free of unfair labor practices or gender discrimination.
READ MORE: Clearance of mobile phones: Customs valuation of 234 brands, models issued
“Xiaomi is pleased and honored to be recognized for our employment practices,” said Wang Xiang, Partner and President of Xiaomi Group. “We recruit talent from around the world and give our employees the best opportunity we can to unleash their creativity to make products that improve the world. Xiaomi is committed to operating at the highest standards and protecting the rights of our employees.”
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SBP makes permission must for import of mobile phone, cars
KARACHI: The State Bank of Pakistan (SBP) has imposed condition for payment on import of mobile phones and motor cars.
The SBP issued a circular related import goods making it mandatory for banks to take prior permission for releasing funds for import of motor cars, mobile phones and other machinery.
READ MORE: SBP may raise policy rate by 100bps to 13.25%
In this regard the SBP informed the banks about Chapter 13 of the Foreign Exchange Manual relating to payments against import of goods.
The SBP decided that with immediate effect, the banks would require prior permission from Foreign Exchange Operations Department (FEOD), SBP-BSC before initiating transactions for import of goods listed in the enclosed Annexure, subject to following conditions:
READ MORE: Banks increasing dollar rates; FAP tells Prime Minister
The above requirement shall be applicable for all import transactions initiated by Authorized Dealers through (i) issuance/ amendment of letter of credit; (ii) registration/ amendment of contract; (iii) making advance payment; (iv) authorizing transactions on open account or collections basis;
The above requirement shall not be applicable on import transactions initiated by the Authorized Dealers on or before the date of issuance of this circular letter;
Authorized Dealers may approach Director, FEOD, SBP-BSC, Head Office, Karachi, along with appropriate documents and its recommendation on a case to case basis;
READ MORE: SBP governor assumes charge of Asian Clearing Union
Authorized Dealers shall be required to suitably amend the importer’s bank profile in Pakistan Single Window to ensure that the aforementioned import transaction shall not be initiated on open account basis without prior permission from State Bank.
All other instructions on the subject shall remain unchanged. Authorized Dealers are advised to bring the same to the knowledge of all the concerned and ensure meticulous compliance of the above & other applicable regulations on the subject. Authorized Dealers are especially instructed to bring these instructions to the knowledge of their customers and advise them to approach the bank before initiation of import transaction of any item covered under this circular letter.
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Pakistan spends Rs217 billion to import mobile phones
ISLAMABAD: Pakistan has spent Rs217 billion to import mobile phones during first seven months (July – December) 2021/2022, according to data release by Pakistan Bureau of Statistics (PBS).
The import of mobile phones grew by 17.25 per cent when compared with Rs185 billion in the first seven months of the fiscal year 2020/2021.
READ MORE: FBR issues updated rates of duty, taxes on mobile phones
The growth in the import of mobile phones may be attributed to depreciation in rupee value against the dollar.
The rupee weakened by Rs17.85 or 11.33 per cent to the dollar when compared Rs157.54 on June 30, 2021 with Rs175.39 as on February 17, 2022.
READ MORE: Regulations needed for used mobile phones’ accessories
The local currency recorded all-time low of Rs178.24 to the dollar on December 29, 2021.
In dollar term, the import of cellphones recorded a growth of 12 per cent to $1.27 billion during first seven months of the current fiscal year as compared with $1.13 billion in the corresponding months of the last fiscal year.
READ MORE: FBR collects mobile phone tax, PTA clarifies
However, the import of mobile phones recorded a decline of 8.68 per cent to $179.77 million in the month of January 2022 when compared with $197 million in the same month of the last year.
The decline may be attributed to production of mobile phones locally.
READ MORE: FBR increases income tax to 15% on cellular services
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FBR issues updated rates of duty, taxes on mobile phones
ISLAMABAD: The Federal Board of Revenue (FBR) has issued the updated applicable rates of duty and taxes for clearance of mobile phones.
The FBR said that following rate of duty and taxes for the clearance of mobile phones shall be applicable during (2021-2022) (with passport applied within 60 days of arrival in Pakistan):
READ MORE: FBR collects mobile phone tax, PTA clarifies
Mobile Phones having cost and freight (C&F) value up to $30, the rate of duty and tax has been fixed at Rs430.
Mobile Phones having C&F value above $30 and up to $100, the rate of duty and tax has been fixed at Rs3,200.
Mobile Phones having C&F value above $100 and up to $200, the rate of duty and tax has been fixed at Rs9,580.
Mobile Phones having C&F value above $200 and up to $350, the rate of duty and taxes shall be Rs12,200 + 17 per cent Sales Tax Ad Valorem.
READ MORE: FBR increases income tax to 15% on cellular services
Mobile Phones having C&F value above $350 and up to $500, the rate of duty and tax shall be Rs17,800 + 17 per cent Sales Tax Ad Valorem.
Mobile Phones having C&F value above $500, the rate of duty and tax shall be Rs27,600 + 17 per cent Sales Tax Ad Valorem.
Rate of duty and taxes on mobile phones 2021/2022 (Applied with CNIC):
Mobile Phones having C&F value up to $30, the rate of duty and tax has been fixed at Rs550.
READ MORE: FBR issues new FED rates on motor vehicles
Mobile Phones having C&F value above $30 and up to $100, the rate of duty and taxes has been fixed at Rs4,323.
Mobile Phones having C&F value above $100 and up to $200, the rate of duty and tax has been fixed at Rs11,561.
Mobile Phones having C&F value above $200 and up to $350, the rate of duty and tax shall be Rs14,661 + 17 per cent Sales Tax Ad Valorem.
Mobile Phones having C&F value above $350 and up to $500, the rate of duty and tax shall be Rs23,420 + 17 per cent Sales Tax Ad Valorem.
READ MORE: Banks to share business account details to FBR
Mobile Phones having C&F value above $500, the rate of duty and tax shall be Rs37,007 + 17 per cent Sales Tax Ad Valorem.