iPhone Prices to Increase Dramatically After Govt Imposes New Sales Tax
Recently, the Federal Board of Revenue (FBR) issued the updated Sales Tax Act 1990 after incorporating amendments made to the Sales Tax Finance Act 2024. According to the updated data, FBR will levy a 25 percent sales tax on the import of mobile phones in Completely Built Unit (CBU) condition with a value exceeding USD 500. This implies that the prices of iPhones would also increase by 25%, and users must pay PTA tax on top of it to use cellular networks in Pakistan.
For instance, the PTA-approved iPhone 15 was available for around PKR 345,000 in Pakistan. If we break down the price, PKR 130,708 goes to PTA tax and else is the retail price of the phone. However, with the imposition of 25% sales, the new price of the PTA-approved iPhone 14 will be around PKR 390,000.
On the other hand, an 18 percent sales tax would be levied on imported CBU phones where the value doesn’t exceed USD 500. The same tax will be applied on the supply of locally manufactured mobile phones in CBU condition and on import in CKD/SKD condition.
The increased taxes are part of the government’s efforts to increase revenue and reduce the fiscal deficit. However, industry stakeholders have raised concerns about the new taxes, and assert that the increased cost of high-end smartphones, potentially affecting sales. The Pakistani mobile phone industry has seen substantial growth in recent years, however the new taxes can prove detrimental to its progress.
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