Govt Plans 20% Excise Duty on Imported Mobile Phones to Boost Local Manufacturing

The federal government is preparing to introduce a 20% Excise Duty on Imported Mobile Phones as part of a broader plan to strengthen local manufacturing and increase exports.

The proposal is included in the new Mobile and Electronics Manufacturing Framework. The Engineering Development Board has finalized the draft and will present it to Prime Minister Shehbaz Sharif for approval.

Under the plan, authorities aim to shift taxation policy by imposing a 20 percent federal excise duty on completely built-up (CBU) mobile phone units. At present, no such excise duty applies to fully assembled imported handsets.

Officials believe the new measure will encourage companies to assemble devices locally instead of importing finished products. The move is also designed to reduce pressure on foreign exchange reserves and promote domestic value addition.

The framework goes beyond mobile phones. It also proposes a 10 percent customs duty on fully built units of laptops, desktops, and tablets. Meanwhile, duties on completely knocked down (CKD) units will start at 5 percent and gradually rise to 10 percent over time.

Another major element of the policy is the creation of a Rs. 56 billion technology investment fund. This fund will support the local production of mobile phones and electronic devices, helping manufacturers expand capacity and improve competitiveness.

The government is also focusing on the export of refurbished electronics. According to estimates, Pakistan could process between 30 and 40 million refurbished mobile phones and laptops each year. This could generate export earnings of $300 million to $400 million annually.

To facilitate this, refurbishment facilities will be set up in export processing zones. These centers will operate under strict customs supervision. Controls such as IMEI registration and time-bound re-export conditions will be applied to ensure transparency and compliance.

Two operational models are under review. One allows temporary imports without foreign exchange payments, backed by bank guarantees. The second permits commercial imports for refurbishment and export under bonded schemes.

Officials say the 20% Excise Duty on Imported Mobile Phones is part of a long-term strategy to build a stronger electronics manufacturing base in Pakistan while boosting export revenue.