Karachi, November 17, 2024 – Mobile phone imports into Pakistan experienced a significant contraction of 10.46% during the first four months of the current fiscal year 2024-25, primarily driven by increased taxation introduced in the latest federal budget.
According to data released by the Pakistan Bureau of Statistics (PBS), mobile phone imports dropped to $421 million during July–October FY25, down from $470 million in the same period last year. The decline underscores the impact of fiscal measures aimed at curbing imports and promoting local manufacturing.
The Federal Board of Revenue (FBR) attributed this reduction to amendments under the Finance Act, 2024, which rationalized the tax framework for mobile devices. The Ninth Schedule now mandates an 18% standard sales tax on locally manufactured mobile devices and their CKD/SKD kits. For imported devices, those valued up to $500 are subject to the same 18% tax, while premium devices exceeding $500 continue to attract a higher sales tax rate of 25%.
Monthly Dynamics and Trends
Despite the overall decline, mobile phone imports witnessed a robust month-on-month (MoM) recovery in October 2024, surging by 70% to $174.34 million compared to $102.62 million in September 2024. Market analysts attribute this uptick to improved economic activity, greater market confidence, and seasonal demand during the festive period.
On a year-on-year (YoY) basis, October 2024 also marked a modest 4.05% increase in mobile phone imports, further underscoring a potential stabilization in consumer demand despite the higher tax burden.
Market and Industry Implications
The contraction in imports aligns with the government’s broader economic strategy to reduce reliance on foreign goods and encourage local manufacturing. However, industry stakeholders warn that persistent tax hikes on mobile phones, particularly high-end devices, may inadvertently dampen technological adoption and create affordability challenges for consumers.
Additionally, while the growth of the local assembly industry is promising, experts emphasize the need for enhanced incentives to strengthen supply chains and improve technological expertise within Pakistan’s manufacturing ecosystem.
Looking ahead, the sector’s performance will likely hinge on balancing fiscal objectives with consumer affordability and technological accessibility. As economic activities rebound, a strategic approach to policymaking could ensure a steady recovery in mobile phone imports while fostering sustainable growth in domestic production.
The data reflects the evolving dynamics of Pakistan’s tech-driven economy, where policy decisions significantly shape market outcomes.
