Mobile phones import: NA panel directs FBR to rationalise duties & taxes

ISLAMABAD: The National Assembly Standing Committee on Finance has directed the Federal Board of Revenue (FBR) to rationalize duties and taxes on the import of mobile phones, as the prices of mobile sets are unaffordable, unrealistic, and extraordinarily high for consumers.

The committee, chaired by Syed Naveed Qamar, held a detailed discussion on Tuesday after a large number of members of the parliament (MPs) argued against “the excessive taxes,” which had pushed even mid-range smartphones out of reach. Qamar stressed that smartphones were no longer a luxury item but a “basic necessity” and said the long-used justification of being “in an IMF program” could no longer be used to continue burdensome duties.

Chairman of the FBR, Rashid Mahmood Langrial, agreed with the observations of the committee, stating that tax rates on the import of mobile phones should be rationalised, but the task of rationalisation of taxes should be given to the Tax Policy Office of the Ministry of Finance. “The Tax Policy Office should lead the work for undertaking this exercise”, the FBR Chairman said.

The Secretary of the Ministry of Finance stated that both the Tax Policy Office and the FBR should do the exercise till the said office becomes fully functional.

Chairman Pakistan Telecommunication Authority (PTA) Major General (R) Hafeez Ur Rehman, opposed the move to end taxes on imported mobile phones, arguing that zero import duties would disturb the local mobile manufacturers.

The FBR Member, Customs informed the committee that the FBR has collected Rs 82 billion in taxes on the import of mobile phones during 2024-25, whereas Rs 18 billion was collected from high-end mobile phones (23 to 24 percent of the total collection from mobile phones). Only a five percent duty is imposed on the import of mobile phones in CKD/SKD kits condition, which are assembled locally. Some local assembly lines are manufacturing mobile phones at prices starting from Rs 15,000.

To a query, the FBR Member Customs said that Samsung phones are assembled in Pakistan.

During the meeting, the National Assembly Standing Committee on Finance further directed the Federal Board of Revenue (FBR) to prepare a comprehensive report on reducing the heavy taxes imposed on smartphones, amid growing criticism that current duties have made mobile phones unaffordable for ordinary citizens.

PPP MNA Ali Qasim Gilani strongly criticized the existing tax structure, claiming consumers were forced to pay taxes again when their mobile phones were lost or replaced. He said FBR’s assessed market values were significantly higher than actual prices, resulting in inflated tax demands. “Even six- to eight-year-old iPhones are being taxed at unrealistic rates,” he said, adding that the FBR had set the value of the iPhone 16 at USD 1,600 despite market prices being far lower.

The FBR Chairman said that if any valuation was found higher than market levels, it would be revised. He noted that average smartphone prices had recently decreased and said FBR could work with the Ministry of IT to rationalize taxes proportionate to actual market trends. He also clarified that Ninth Schedule of the Sales Tax Act directly deals with the mobile phone taxation.

According to FBR data, Rs 82 billion in total mobile-related taxes and Rs 18 billion specifically from smartphones were collected in the last fiscal year.

Committee member Sharmila Farooqi called the current taxation regime “excessive and unfair,” revealing she had purchased a phone worth Rs 370,000 but had not opened the box because the tax payable amounted to Rs 190,000. “Sixty percent tax on a single phone is unjustified. Take taxes, but not to the point where taxpayers can’t breathe,” she said.

Representatives from the Pakistan Telecommunication Authority (PTA) rejected claims that the authority imposed any direct taxes, stating all duties were collected by the FBR. The PTA Chairman added that 94 percent of smartphones used in Pakistan were locally assembled, while only 6 percent — primarily higher-end models — were imported. “Except for Apple, all major smartphone brands are now being manufactured in Pakistan,” tax officials added.

The PTA chief also said Pakistan’s 5G spectrum auction was planned for February–March next year, with full deployment expected by 2026.

MNA Mirza Ikhtiar Baig said the assumption that smartphones were used only by the wealthy was incorrect. He urged the government to adopt a fair valuation mechanism and rationalize taxes in line with expanding local manufacturing.

Following hours of deliberation, the committee tasked the FBR with preparing a detailed plan for reducing smartphone taxes and ordered that a final report be presented by mid-March 2026.

“This matter must now be resolved. Smartphone taxation can no longer be treated like vehicle taxation. Rationalization is essential,” Chairman Naveed Qamar concluded,

Copyright Business Recorder, 2025