ISLAMABAD: Import of cell-phone has become 86 per cent cheaper as the FBR slashes import duties. But it’s only for phones that cost $100 or less.
The sales tax on import of cell-phones that cost up to $100 has been reduced from Rs1,320 to Rs200. The FBR is amending its tax laws with effect from December 28, 2019.
Cell-phones worth less than $100 will be charged withholding tax of Rs200. People buying phones in this slab were previously paying Rs750 in duties.
The import volume of cell-phones halfway through the 2019-20 financial year (July to November 2019) was recorded at $391 million while last year’s imports for the same time period were $248 million. This means imports increased by 58 per cent.
Heavier duties were imposed last May to increase the volume of tax collected on luxury imports.
However the Senate Standing Committee on Information Technology advised the FBR to slash duties as they did not mesh well with the vision of digitising Pakistan, reported SAMAA.
In September, the FBR had proposed cuts in the Customs regulatory duties of mobile phone imports in order to encourage digitisation and the “provision of relief to the common man”.
“This reduction in duty/tax is expected to increase import volume of mobiles in Pakistan,” read a notfication by the FBR.
In a move to digitize Pakistan, the ministry of commerce and the ministry of IT have collectively worked out a proposal for revised sales tax rates and regulatory duties on the import of mobile devices, an FBR official told SAMAA Digital.
“The proposal is under debate and at least one meeting has been held between the stakeholders.”
The official said this proposal has “drawn the ire of the local manufacturers,” as the projected slash in exorbitant duties on expensive phones will affect the sales of local products.
“It is expected that after another meeting with stakeholders, a unanimous agreement on the tax cuts will be reached,” he added.
Sales and withholding taxes on phones that cost above $100 remain unchanged for now and the revision in the regulatory duties on the import of phones at Customs is in the pipeline
The FBR chairperson announced that the board collected over 16% more tax by the end of the second quarter of FY20, than it did last year. The total taxed amount collected was Rs2.08 trillion.
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