NA Panel Orders FBR to Cut Heavy Smartphone Taxes

The National Assembly Standing Committee on Finance has directed the Federal Board of Revenue (FBR) to prepare a comprehensive report on reducing the heavy taxes imposed on smartphones, amid growing criticism that current duties have made mobile phones unaffordable for ordinary citizens.

The committee, chaired by Syed Naveed Qamar, held a detailed discussion on Tuesday after multiple lawmakers argued that excessive taxation had pushed even mid-range smartphones out of reach. Qamar stressed that smartphones were no longer a luxury item but a “basic necessity” and said the long-used justification of being “in an IMF program” could no longer be used to continue burdensome duties.

NA Panel Orders FBR to Cut Heavy Smartphone Taxes

PPP MNA Ali Qasim Gilani strongly criticized the existing tax structure, claiming consumers were forced to pay taxes again when their mobile phones were lost or replaced. He said FBR’s assessed market values were significantly higher than actual prices, resulting in inflated tax demands. “Even six- to eight-year-old iPhones are being taxed at unrealistic rates,” he said, adding that the FBR had set the value of the iPhone 16 at USD 1,600 despite market prices being far lower.

FBR Chairman said that if any valuation was found higher than market levels, it would be revised. He noted that average smartphone prices had recently decreased and said FBR could work with the Ministry of IT to rationalize taxes proportionate to actual market trends. He also clarified that Schedule Nine directly covered mobile phone taxation. According to FBR data, Rs 82 billion in total mobile-related taxes and Rs 18 billion specifically from smartphones were collected in the last fiscal year.

Committee member Sharmila Farooqi called the current taxation regime “excessive and unfair,” revealing she had purchased a phone worth Rs 370,000 but had not opened the box because the tax payable amounted to Rs 190,000. “Sixty percent tax on a single phone is unjustified. Take taxes, but not to the point where taxpayers can’t breathe,” she said.

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Representatives from the Pakistan Telecommunication Authority (PTA) rejected claims that the authority imposed any direct taxes, stating all duties were collected by the FBR. The PTA Chairman added that 94 percent of smartphones used in Pakistan were locally assembled, while only 6 percent — primarily higher-end models — were imported. “Except for Apple, all major smartphone brands are now being manufactured in Pakistan,” tax officials added.

The PTA chief also said Pakistan’s 5G spectrum auction was planned for February–March next year, with full deployment expected by 2026.

Industrialist Mirza Ikhtiar Baig said the assumption that smartphones were used only by the wealthy was incorrect. He urged the government to adopt a fair valuation mechanism and rationalize taxes in line with expanding local manufacturing.

Following hours of deliberation, the committee tasked the FBR with preparing a detailed plan for reducing smartphone taxes and ordered that a final report be presented by mid-March 2026.

“This matter must now be resolved. Smartphone taxation can no longer be treated like vehicle taxation. Rationalization is essential,” Chairman Naveed Qamar concluded.