Govt Has Reduced Taxes on Mobile Phones, Not Increased Them

After the mini-budget yesterday, we’ve been increasingly hearing that the PTI government has increased taxes on mobile phones, especially the expensive ones. We don’t blame people for saying that – after all, it’s what Asad Umar himself said in the speech to the Parliament.

However, the fact is that the government has actually reduced taxes.

The misconception is being perpetuated due to two reasons.

First, the taxes on mobile phones we outlined in a previous article already existed under the PML-N government as well. The only difference is that they chose not to enforce them. The new government started enforcing them and it got them a wave of negative publicity which is bizarre because they simply started applying the letter of the law.

Second, the media seems to have it out for the PTI government. PTI’s decision to cut media budgets wasn’t a popular one as channels and traditional media were forced to reevaluate their business models and fire hundreds of staff. As a result, any negative spin is gaining far more traction than usual, which is unfortunate because the mini-budget has been received positively by most, if not all, of the businesses we’ve talked to.

Let’s clear the misconceptions once and for all.

The PTI government has rationalized taxes on mobile phones. Previously, 7 different types of taxes were being applied and now they’ve been cut down to 3. Here’s how the old and new tax rates compare.

Value of Phone Old Taxes New Taxes
Upto $30 Minimum Rs. 2,500 Rs. 210
$30 to $100 Rs. 2.5k to Rs. 6.3k Rs. 2200
$100 to $200 Rs. 6.3k to Rs. 13k Rs. 3300
$200 to $350 Rs. 13k to Rs. 22.7k Rs. 4400
$350 to $500 Rs. 22.7k to Rs. 30.4k Rs. 12,500
Above $500 Rs. 30k to Rs. 83k Rs. 22,500

 

One more aspect to be noticed here is that due to these slabs, flagship phones that cost $1000 or more will also be taxed at the same rate as a $500 phone, making such devices cheaper for the general public.


    • Please read this carefully:

      According to the document, Cellular mobile phones or satellite phones to be charged on the basis of import value per set, or equivalent value in rupees in case of supply by the manufacturer.

      Mobile Value and Tax in Rupees

      Mobile Phone not exceeding $30 (Rs.150)

      Mobile Phone exceeding $ 30 but not exceeding $ 100 (Rs. 1,470)

      Mobile phones exceeding $100 but not exceeding $200 (Rs. 1,870)

      Exceeding $ 200 but not exceeding uS$ 350 (Rs. 1,930)

      Exceeding $ 350 but not exceeding US$ 500 (Rs.6,000)

      Exceeding $ 500 (Rs. 10,300)

      Meanwhile, Federal Board of Revenue Combine Tax will be applicable on imported mobile phones.

      Member policy FBR while briefing in Islamabad gave details of the imported cellular phones.

      According to details, Rs 400 tax will be applicable on mobile phones worth Rs10,000; Rs4000 tax on phones of price Rs28,000; Rs6000 tax on phone worth Rs60,000; Rs8000 tax on phone worth Rs105,000 and Rs23000 tax on the phones worth Rs150,000 while Rs41,000 tax on the phones worth more than Rs150,000.

      • you do realize that a combined tax of FBR is on imported phone sets while the tax on manufacturer (NOKIA, SAMSUNG, etc.) supplied sets is different!

  • Are you sure can you describe any old taxes. Such as is Some mobile have price 600$ and it price normally around PKR 70000 to 800000. That doesn’t match your old taxes.

  • Brothers to clear it out these taxes will now be applicable on new phones too supplied by manufacturers so new phones will be expensive too. There is no reduction just rephrasal of words.

    The only thing they reduced is taxes on import phones which PTI levied 80 thousand plus on a high end phone like note 9 or iphone X max which is now around 45 thousand.

    So in short new phones also got expensive.

    • Please refrain from spreading rumours. You can check PTA website as well FBR’s SROs.
      The current government did not apply the expensive taxes, the taxes were already being paid on PTA-approved handsets. Only used or smuggled phones were avoiding taxes.
      The taxes have been changed for the first time under this government.

      • you can read my comment properly where i wrote they reduced the import duty taxes because people were not willing to pay combined taxes of around 85 thousand on a Note 9 or Iphone X. it was not only hurting a common user but businesses too.

        Other thing is at airports they check the value of phone as new even if u tell them it’s used.

        there is no mis-information, the ground reality is, if u are importing a 500$+ phone u still have to pay around 45 thousand combined taxes. this has been mentioned in the press release you can find in THE NEWS article.

  • Simply because pmln government had that taxes in law but they chose not to apply these. Just read the full article and you will get your answer.

  • “flagship phones that cost $1000 or more will also be taxed at the same rate as a $500 phone, making such devices cheaper for the general public.”

    Seriously? What do you actually mean by “General Public”?
    “The rich ones”? You actually seemed to tell that, I assume.

    This “single phenomena” is making rich – the richer, and a poor – the poorer.

    Those flagship phones are actually the luxury items which are intended to be sold to the rich and capable buyers. The ones, who don’t really need to calculate their budget before buying anything – “literally anything”. And you are all calling them “the general public”

    Well, yes the people who take care of their budget before buying anything, are idiots (not general public). Right? because they are charged according to what they prefer to buy. (not preference actually because they can’t really go beyond their budget) and they don’t ask questions about it.

    This is the same thing in four-wheels market, we have witnessed for years. That’s never changed and now it’s gonna applied on smartphones. Something I heard when Imran Khan used to tell he’s gonna take taxes out of rich’s pockets. Think that’s not gonna happen sooner or later.

    Thanks but no thanks.


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