Pakistan Telecommunication Authority (PTA) has informed the senate committee that more than 10 million mobile phone handsets were imported during 2018-19 and government collected around Rs 28.8 billion taxes. However, during the first four months of the current fiscal year around 7.6 million phones were imported and the government collected a record Rs 15.1 billion under the head of duties and taxes, indicating that increased in legal imports of mobile devices.
Chairman Federal Board of Revenue (FBR) Shabbar Zaidi on Monday said that the recommendation for allowing duty-free import of mobile phones under baggage rule would be tabled before the federal cabinet. The facility that is being provided shall cost the nation billions in Taxes.
Pakistan collects Rs 28.8 billion ($ 185 Million) in mobile taxes using DIRBS
Briefing the Senate Standing Committee on Information Technology and Telecommunication, chairman FBR said that baggage rule was misused in the past, compelling the government for withdrawing the facility and duty/taxes are applicable on every mobile handset import. The senators from the government benches also opposed the government’s decision of imposing a duty on import of even a single mobile phone handset. The committee recommended for suspending an order of FBR and allowing one duty-free mobile phones’ import under the baggage rules.
The Committee was of the view that well off people can afford any price of phones and taxes levied on them but the larger part of the population who are using phones for multiple purposes cannot afford it. However, considering that, the taxes on low-end devices have already been reduced drastically, and most of the individual users importing their phones are happy with that.
(Try our Mobile Tax Calculator to find the tax you’d have to pay on any mobile phone that you bring into Pakistan).
Furthermore, the FBR gave a briefing on the reasons for withdrawal of customs duty exemption on the imported phone per the calendar year under the personal baggage rules. The member FBR informed the committee that the duty-free allowance on import of mobile phone brought by international passengers was withdrawn vide amending SRO 689 (I) 2019 dated 29-6-2019. The said SRO was made effective from 1-7-2019. The reasons for withdrawal of duty-free allowance were that the facility was being misused. Data of international arriving passengers were being stolen and the passport numbers and flight data were being used to enter data details in the Mobile Device Registration Software to claim an exemption under the baggage rules.
He further said that expensive mobile devices were mostly being registered by using international passengers’ data. Furthermore, the government desired that there should be uniformity in the application of duty/taxes whether brought into Pakistan by passengers or locally procured and, therefore, the exemption was withdrawn to avoid this anomaly, he added.
Pakistan Telecommunication Authority (PTA) advised that more than 0.6 million were imported under the baggage rule and most of them were of high end and expensive and it was reported that the facility is being misused. The main reason being that most of these imported handsets weren’t by individuals, rather businesses for commercial use. He further said that taxes were still reviewed and reduced for commercial and baggage import.