Pakistan considers relief on mobile phone taxes amid budget review

ISLAMABAD: The Standing Committee on Finance of the National Assembly has recommended reducing the burden of heavy taxes imposed on mobile phones in the country, after which there is a possibility of reducing the prices of expensive phones in the upcoming federal budget.

According to details, the issue of a sharp increase in the prices of expensive smartphones in Pakistan and heavy taxes imposed on them has intensified.

The Standing Committee on Finance of the National Assembly has expressed serious concern over the heavy taxes and duties imposed on mobile phones in the country and has demanded that the government provide immediate relief to consumers.

In a recent meeting of the Standing Committee, it was revealed that the prices of expensive smartphones in Pakistan have become unaffordable due to the burden of taxes.

The committee was informed that at least Rs 76,000 in tax is being collected on imported phones worth more than $ 500, while the tax rate on phones worth $ 700 to $ 750 has reached 55 percent.

The meeting said that in addition to 18 percent GST, a withholding tax of about Rs 11,500 is also being collected on premium phones.

In addition, where there is a tax of up to 55 percent on imported phones, the tax rate on locally manufactured phones is only 25 percent, which is aimed at promoting local industry.

Chairman of the committee, Syed Naveed Qamar, said that access to modern technology is indispensable for economic development. He questioned the logic of collecting income tax on top of sales tax, calling it unfair.

FBR officials clarified that at present there is no scope for immediate reduction in the 18 percent GST or Rs 11,500 withholding tax, however, efforts will be made to rationalize all these taxes during the budget preparation process.

The standing committee directed that the government present a mobile phone policy in the next budget that can end the uncertainty in the market and provide relief to common consumers.