Mobile phone taxes in Pakistan came under scrutiny as the National Assembly’s Standing Committee on Finance raised serious concerns over heavy taxation on smartphones and recommended relief measures to make technology more accessible to consumers.
The issue was discussed amid broader policy efforts to promote digital adoption and support economic growth through improved access to modern technology.
Committee Reviews Mobile Phone Tax Structure
A meeting of the committee, chaired by Naveed Qamar, reviewed the collection of duties and taxes imposed on mobile phones. Officials from the Federal Board of Revenue, including Chairman Rashid Mahmood Langrial, briefed members on the existing taxation framework.
During the briefing, officials disclosed that a withholding tax of Rs76,000 is levied on mobile phones priced above $500.
High Tax Rates on Imported Smartphones
FBR officials informed the committee that the total tax burden on such imported mobile phones reaches 54%. For devices priced between $700 and $750, the effective tax rate rises further to 55%, significantly increasing costs for consumers.
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Officials explained that imported smartphones continue to face substantially higher taxation compared to locally assembled devices.
GST and Additional Taxes Explained
Representatives from the Tax Policy Office told the committee that an 18% General Sales Tax (GST) is also imposed on mobile phones. They added that while concessional income tax applies in some cases, withholding tax on high-end devices can reach up to Rs11,500.
Authorities stated that there is currently no immediate scope to reduce the 18% GST or withholding tax under existing fiscal constraints.
Local Manufacturing Receives Tax Relief
The committee was informed that while imported phones face duties of up to 54%, locally manufactured mobile phones benefit from significantly reduced taxation, with total tax rates lowered to around 25% as part of government efforts to encourage domestic production.
Committee Recommends Tax Reductions
The Standing Committee on Finance recommended reducing mobile phone taxes to improve affordability and expand access to technology. Naveed Qamar stressed that rationalizing tax policy is critical for promoting digital inclusion and economic development.
He also pointed out that if sales tax is already imposed on mobile phones, additional income tax may be unnecessary, calling for simplification of the taxation regime.
Budget Proposals Expected
Qamar urged authorities to present a clear and transparent mobile phone tax policy in the upcoming federal budget. Officials from the Tax Policy Office assured the committee that its recommendations would be reviewed during budget preparations for the next fiscal year.
They added that facilitating access to modern technology would play an important role in strengthening Pakistan’s economy.
