Proposed 18% Sales Tax on Mobile Phones Rejected by Senate Committee

In the recent budget announcement, the government of Pakistan proposed an 18% sales tax on mobile phones priced up to $200. The proposed measure faced backlash from the mobile phone industry. The Senate Standing Committee on Finance and Revenue has also rejected the government’s proposal. The decision to reject the 18% sales tax was made during a meeting chaired by Senator Salim Mandviwalla.

Moreover, during the meeting, Senator Anusha Rehman also opposed the proposed tax, saying that mobile phones are essential commodities and not luxuries. She emphasized that levying such a tax would increase the prices of budget phones, making them unaffordable for the majority of consumers in Pakistan. “Mobile phones are necessities, not luxuries. This tax would place an undue burden on the poor,” Rehman emphasized.

In addition, Rehman also lamented the federal government for placing an immense financial burden on less privileged segments of society in line with the IMF demands. She highlighted that there are already multiple taxes on mobile phones, including levies on calls and charging services.

On the other hand, Senator Mandviwalla expressed fears over the impact of the Federal Board of Revenue’s (FBR) tax policies on investor confidence. He criticized the current tax regime and claimed that it is deterring investors from engaging in the country, which stagnates economic growth. Mandviwalla emphasized the need for a more balanced tax policy that does not suppress investment and economic development.

Also read:

PTA To Impose New Tax on All Models Of Locally Manufactured Mobile Phones

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