Importing mobile phones become 86% cheaper as FBR slashes import duties

Federal Board of Revenue (FBR) slashes import duties making 86 percent cheaper for importing mobile phones, but it is only for mobiles that cost $100 or less.

The sales tax on importing mobile phones has reduced from Rs 1,320 to Rs 200. The FBR is amending its laws with effect from December 28, 2019.

Mobile phones worth less than $100 will be charged withholding tax of Rs 200. People buying phones in this slab were previously paying Rs 750 in duties.

The import volume of mobile phones was estimated at $391 million halfway through the financial year 2019-20 (July to November 2019), while previous year’s imports were $248 million for the same duration. It means an increase of 58% in imports.

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 digitizing Pakistan.

In September, the FBR proposed reductions in customs regulatory duties on mobile phone imports to promote digitization and “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.

“Alhumdulillah, the FBR has collected Rs2,080 billion by this time for the half year ended December 31, 2019. This is higher by 16% over last year for the same period,” read a tweet from FBR Chairman Shabbar Zaidi.

https://twitter.com/ShabarZaidi/status/1212028374899679232

However the revised tax collection target for the first half of the fiscal year was Rs 2198 billion, already decreased from the original target of Rs 2,367 billion. Which means the FBR collected Rs118 billion less than it was expected to in spite of the considerable revision.