FBR Plans Duty Rationalisation on Mobile Phone Imports

The Federal Board of Revenue (FBR) is formulating a comprehensive proposal aimed at rationalising customs duties and taxes applicable to mobile phone imports, in response to parliamentary concerns regarding the affordability of smartphones for the general populace.

According to official sources cited by Business Recorder, the draft proposal is being prepared for presentation before the National Assembly Standing Committee on Finance and incorporates a thorough review of the prevailing tax structure, alongside consultations with the Pakistan Telecommunication Authority (PTA).

In recent engagements with tax authorities, cellular mobile operators have advocated for the complete withdrawal of regulatory duties on telecom power equipment not manufactured locally, as well as a broader rationalisation of import duties on telecom-related hardware. They further contended that telecom services ought to be exempted from inclusion in the retail price list regime, given that operators do not import goods intended for direct retail sale.

FBR representatives acknowledged the necessity of aligning mobile phone import taxation with prevailing market realities, highlighting that average smartphone prices have moderated in recent months. Officials indicated that closer coordination with the Ministry of Information Technology would facilitate appropriate calibration of duty rates to reflect current pricing dynamics, with any import valuations determined to exceed market benchmarks slated for downward revision.

During the fiscal year 2024–25, the FBR realised Rs82 billion in tax revenue from mobile phone imports, of which Rs18 billion stemmed from high-end smartphones—representing approximately 23–24% of the aggregate mobile telephony-related tax collections.

Notably, imports in Completely Knocked Down (CKD) or Semi-Knocked Down (SKD) condition for local assembly attract only a 5% customs duty, enabling domestically assembled handsets to be offered in the market from as low as Rs15,000.