The Government of Pakistan, via a presidential ordinance, has reduced the rate of withholding income tax and the sales tax on the import of budget/affordable mobile phones.
The Federal Board of Revenue (FBR) issued a list of salient features to explain the amendments to Income Tax Ordinance, 2001 through Tax Laws (Second Amendment) Ordinance, 2001. The amendments will apply to income tax, sales tax and customs duty.
Reduction in Withholding Tax:
As per this order, withholding taxes have been reduced for mobile phones having a value of USD 30 to USD 100, from PKR 730 to PKR 100 per mobile phone.
Reduction in Sales Tax:
Sales tax on mobile phones that cost up to USD 30 has been reduced to PKR 100 and on phones that cost up to USD 100, the sales tax has significantly been reduced to PKR 200.
Speaking about this amendment, Jazz Chief Corporate & Regulatory Affairs Officer Syed Fakhar Ahmed said,
“The government’s move to reduce the duty on basic smartphones is a welcome decision. For a truly #DigitalPakistan, affordable and quick access to the Internet is critical. With this pro-technology move, we also predict improved social impact in healthcare, education and digital financial services, especially in underserved areas of Pakistan. We look forward to more substantive policies that make Pakistan digital in the long term.”
All of this would ultimately assist Prime Minister Imran Khan‘s ‘Digital Pakistan’ vision, aiming to bridge the digital divide by improving on digital infrastructure, investment in digital skills and literacy. The idea is to ensure Pakistan is soon at par with global players in the field of technology and innovation.
We’d update you once we find out further information regarding mobile phone import taxes in 2020. Stay tuned!