Govt Plans 20% Excise Duty on Imported Mobile Phones Amid Existing PTA Tax Burden

The government is preparing to impose a 20% federal excise duty (FED) on the import of completely built unit (CBU) mobile phones under a proposed Mobile and Electronics Manufacturing Framework 2026-33, adding to the existing tax burden faced by consumers under the PTA mobile registration regime.

Currently, imported mobile phones do not attract federal excise duty at the CBU stage. However, consumers already pay substantial taxes at the time of device registration through the Device Identification, Registration, and Blocking System (DIRBS) administered by the Pakistan Telecommunication Authority (PTA).

Officials say the proposed excise duty is aimed at addressing competitive distortions linked to the Pakistan–China Free Trade Agreement and encouraging large-scale local manufacturing.

Broader Tax Restructuring in Electronics

The framework, finalized by the Engineering Development Board (EDB), also proposes:

• A 10% customs duty on the CBU import of notebooks, desktops, and tablets.
• A phased customs duty on completely knocked down (CKD) units, starting at 5% and later increasing to 10%.

The Ministry of Industries and Production is expected to present the policy to Prime Minister Shehbaz Sharif for approval.

$400m Refurbished Re-Export Target

Alongside tighter import measures, the government aims to generate $300 million to $400 million annually through the refurbishment and re-export of used mobile phones.

Under the proposed mechanism, 30 to 40 million devices could be refurbished each year within export processing zones. Investors may be allocated gated spaces of approximately one acre to establish refurbishment facilities.

Two operational models are under consideration:

• Temporary import for re-export, without foreign exchange remittance at the import stage, backed by service agreements and bank guarantees.
• Commercial import with full remittance, followed by refurbishment and re-export under bonded or export facilitation schemes.

Both options would require strict IMEI declaration and blocking controls to prevent leakage into the domestic market.

The framework also proposes a Rs56 billion technology investment fund to support domestic manufacturing of mobile phones and other electronic devices. Officials say the broader objective is to position Pakistan as a regional electronics manufacturing hub while promoting employment, technology transfer, and export-led growth.

If approved, the policy would significantly reshape Pakistan’s mobile import structure—layering a new excise duty on top of the existing PTA registration taxes while incentivizing local assembly and re-export activity.

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