FBR hints at tax relief on imported mobile phones up to $200

Federal Board of Revenue Chairman Rashid Mahmood Langrial on Sunday assured the National Assembly Standing Committee on Finance that the government would review a reduction in the 20% regulatory duty on imported mobile phones, particularly for handsets priced up to $200.

According to media reports, the committee, chaired by Syed Naveed Qamar, also approved proposals to impose higher customs and special excise duties on imported hybrid, electric and luxury vehicles.

Briefing the committee, FBR officials said imported mobile phones priced up to $30 face an effective tax rate of 25%, while handsets valued between $31 and $100 are taxed at 36%.

Phones priced between $101 and $200 are subject to an effective tax rate of 40%, while those valued between $201 and $350 are taxed at 38%.

Smartphones priced between $351 and $500 attract a 40% effective tax rate, while handsets costing more than $500 face an effective rate of 41%.

Officials said the tax burden increases with handset value, with per-unit taxes ranging from Rs1,500 to Rs141,500.

They said 44% of imported mobile phones fall in the $31 to $100 category, while the average effective tax rate across all imported phone categories stands at 39.6%.

Committee members said millions of non-PTA-approved mobile phones were in use across the country and proposed an instalment-based mechanism for paying mobile phone taxes.

They said such facilities were available internationally, including for low-value consumer goods.

The committee chairman directed the FBR and the Pakistan Telecommunication Authority to jointly prepare a workable proposal for an instalment payment system.

Committee member Hina Rabbani Khar questioned whether the high taxes on mobile phones were meant only to raise revenue or to protect a particular company.

She said consumers should not have to bear such a heavy financial burden when buying mobile phones.