PTA Delay Halts Mobile Auction, Threatening Revenue

The auction of tens of thousands of confiscated mobile phones has been delayed, causing significant revenue loss to the national treasury, a situation with critical tax implications for government revenue and business compliance. Our tax law firm urges clients to monitor this fiscal setback and ensure adherence to Federal Board of Revenue (FBR) regulations as the issue unfolds.

The Pakistan Telecommunication Authority (PTA) has failed to whitelist these devices under the Device Identification Registration and Blocking System (DIRBS), stalling auction plans despite repeated requests from the Customs Department at key airports—Karachi, Lahore, Multan, and Faisalabad—where over 10,000 phones were seized in recent months. Collector Customs (Airports) warns that the depreciating value of premium models (e.g., iPhones, Samsung Galaxy) due to market influx undermines the auction’s purpose, potentially costing the government millions of rupees. Recent web reports confirm this delay, with Customs sources noting minimal progress despite submitted lists, while a PTA official claims no formal request was received—highlighting a communication breakdown.

From a tax law perspective, this delay jeopardizes customs duty revenue under Section 25 of the Customs Act, where seized goods typically contribute to government coffers via auctions. Businesses involved in mobile trade or customs clearance must ensure compliance with sales tax at 17% and withholding tax (WHT) on transactions, as FBR audits may scrutinize revenue leakages. The depreciation of seized assets could also affect taxable income adjustments under Section 29 of the Income Tax Ordinance, requiring meticulous documentation to claim deductions.

Critically, the PTA’s denial of receiving requests contrasts with Customs’ assertions, suggesting either bureaucratic inefficiency or a deliberate stall—web sources like TechJuice and ProPakistani report similar PTA delays, hinting at systemic issues in DIRBS implementation. This narrative of “unintended delay” may mask deeper revenue mismanagement, especially as trending sentiments on X reflect public frustration over lost treasury funds. Clients should anticipate retroactive tax measures to offset this loss.

Our firm advises clients to review customs obligations, ensure tax compliance, and prepare for FBR scrutiny, navigating this revenue-challenged scenario.