ISLAMABAD: The Federal Board of Revenue (FBR) is considering reducing taxes on imported mobile phones valued at up to $200, while also exploring an installment-based payment facility for PTA taxes on smartphones.
Speaking before the National Assembly Standing Committee on Finance and Revenue, FBR Chairman Rashid Mahmood Langrial said the government is reviewing the possibility of lowering taxes on imported mobile phones in the lower-price segment to make smartphones more affordable for consumers.
According to Langrial, imported mobile phones currently generate around Rs. 37 billion in annual tax revenue. Apple smartphones alone contribute approximately Rs. 21 billion of the total collection.
Current PTA Tax Structure on Imported Smartphones
FBR officials briefed the committee on the existing tax regime for imported mobile phones. Under the current structure:
- Smartphones priced between $101 and $200 face a tax burden of around 40%.
- Devices valued between $201 and $350 are taxed at 38%.
- Phones costing between $351 and $500 attract a 40% tax rate.
- Handsets priced above $500 are subject to approximately 41% tax.
The average effective tax rate across all imported mobile phone categories stands at 39.6%.
Depending on the device’s value, PTA and tax charges range from approximately Rs. 1,500 to Rs. 141,500 per handset. FBR officials also revealed that nearly 44% of imported phones fall within the $31-$100 price bracket.
NA Committee Proposes Installment Facility for PTA Tax Payments
The National Assembly Standing Committee also directed the FBR to develop a mechanism allowing consumers to pay PTA taxes on smartphones through installments.
Committee members highlighted that millions of non-PTA-approved phones are currently being used across Pakistan and argued that installment plans would encourage users to legally register their devices.
Lawmakers noted that installment-based purchasing is a common practice worldwide, even for relatively low-cost products, and suggested a similar approach for PTA tax payments.
Committee Chairman Syed Naveed Qamar instructed the FBR to coordinate with the Pakistan Telecommunication Authority to prepare a proposal for introducing installment-based tax payments on mobile devices.
Revenue Concerns Over Tax Reduction
During the meeting, some lawmakers questioned whether the existing tax structure was designed primarily to maximize revenue collection or to protect local mobile phone manufacturers.
FBR officials defended the current taxation framework, describing it as an important source of government revenue. Meanwhile, the Finance Secretary cautioned that reducing taxes on lower-priced smartphones could result in an estimated Rs. 1 billion revenue shortfall, which would need to be compensated through alternative revenue measures.
The proposal to reduce taxes on imported phones below $200 and introduce installment payment options is expected to provide relief to consumers while increasing the registration of mobile devices across the country.
