FBR clarifies news about significant reduction of taxes on import of smart phones

ISLAMABAD: The Federal Board of Revenue (FBR) on Wednesday issued a clarification that according to Government’s Digital Pakistan Initiative, the government is cognizant of the fact that local manufacturers might need some protection to provide them an even playing field in the market and to encourage local manufacturing of smart phones in Pakistan.

Through a recently issued presidential ordinance, the government had reduced withholding and sales taxes on imported phones valuing between $30 and $100 which was decried by local industry.

According to the FBR, a committee under the chair of Prime Minister’s Advisor on Commerce, Textile, Industry, Productions and Investment Abdul Razak Dawood is already working. A final decision in this regard will be taken by the Economic Coordination Committee (ECC) after consulting all the stakeholders.

According to the salient features of the ordinance published by FBR, “Prior to the promulgation of the Tax Laws (Second Amendment) Ordinance, 2019, the rate of withholding income tax on the import of mobile phones was Rs730 in case of a mobile phones having value exceeding 30 US Dollars and up to 100 US Dollars. In order to complement the efforts of the government towards promotion of financial inclusion, income tax at the import stage in respect of mobile phones having value exceeding 30 US dollars and up to 100 US dollars has been reduced from Rs730 to Rs100 per mobile phone.

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“Sales tax on the aforementioned mobile phones has also been reduced from Rs130 to Rs100. For mobile phones valuing above $100, the sales tax has been revalued from Rs1,320 to Rs200.”

Prior to this move, the government had already revised the sales tax rates on mobile phones, reducing them from Rs1,470 to Rs1,320 for phones costing up to $100. The maximum amount of sales tax, that is for phones above $500 value, was also reduced from Rs10,300 to Rs9,270.



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