Govt Collects Rs 92B in Mobile Taxes; Claim Your Refund!

The Government of Pakistan collected Rs 92 billion in advance tax from mobile phone users during the fiscal year 2023-24. Compared to the previous year, the collection of advance tax has increased by 15%. These numbers were revealed in a report by the finance ministry presented to the National Assembly on Monday.

In the budget for 2024-25, the government also revised the way it taxes mobile phones. Rather than continuing with a slab-based system, there is now a flat 18% sales tax for phones worth up to $500. This applies to imported completely built units (CBUs), semi-knocked-down (SKD) devices, and locally manufactured phones.

Meanwhile, for phones whose values exceed $500, the tax is 25% for fully imported phones and 18% for SKDs and locally-made phones. In this regard, the Finance Minister in his budget speech on June 12 said,

“Concessionary rates create distortions by only benefiting some specific items in the market while the standard rate ensures that everyone gets equal opportunity and market forces work effectively.”

In the fiscal year 2022-23, the advance tax on mobile phones amounting to Rs80 billion was collected, while Rs61 billion was collected in 2022, Rs55 billion in 2021, and Rs50 billion in 2020 respectively. It is pertinent to mention here that the advance tax collected from mobile users is adjustable, implying that users can claim a refund when filing their income tax returns.

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