PTA tax reduction on phones to be considered during next budget

ISLAMABAD: The National Assembly Standing Committee on Finance on Thursday recommended a reduction in mobile phone taxes as lawmakers reviewed the collection of duties and taxation structure on imported and locally assembled devices.

The committee received confirmation from tax officials who stated that they would examine the issue during the upcoming fiscal year budget process.

Chairman Federal Board of Revenue FBR Rashid Mahmood Langrial and Tax Policy Office officials presented the meeting information. The report informed that imported mobile phones, which cost more than 500 dollars, now face a total tax burden that reaches approximately 76000 rupees and an overall tax rate of 54 percent.

Imported devices in the 700 to 750 dollar price range face an even higher tax rate of about 55 percent. The committee received information that imported mobile phones face a 54 percent tax on their value, while locally made or assembled phones face a lower tax rate of approximately 25 percent.

The committee received information that an 18 percent general sales tax GST currently applies to mobile phones, which also face concessional income tax and a withholding tax that approaches Rs. 11,500 on high-priced devices.

FBR officials stated that there is currently no scope to reduce the existing 18 percent GST or withholding tax. Committee Chairman Sayed Naveed Qamar emphasized the need to encourage modern technology in the country, stating that it contributes to economic improvement.

He added that when sales tax is already being applied, there is no justification for additional income tax on mobile phones.