Importers Used Identity Theft to Import Phones Without Paying Duties: Minister

Minister of State for Revenue Hammad Azhar has informed the mobile phone importers that some cases of data theft have been referred to the Federal Investigation Agency (FIA). These cases involved a few individuals who misused the facility of legalizing mobile phones as admissible baggage, which is available to incoming international passengers.

During a meeting with All Pakistan Mobile Association at the FBR House, Hammad Azhar informed the delegation that the imports of mobile phone have been down by nearly 25 percent after January 15, 2019. However, there was a slight increase in revenue from mobile devices during this period. 

Despite a decrease in volume, there was an increase in tax collection from the import of mobile phones and recovery has been improved. “It is a positive trend as the density of taxes has been increased on the import of mobile phones,” he remarked.

FBR also gave a presentation to the Ministry of Finance on the mobile phone industry, showing that the recovery of taxes from mobile phones has been improved. The government has taken a long-term approach for the mobile phone industry and estimated the revenue expected in the next five years from this industry when compared with the last five years.

The people had halted their import consignments in anticipation of the new tax regime for the import of mobile phones during the last two months. Now that the Finance Amendment Bill has been passed by the Parliament, a notification will be issued and people are expected to clear their held-up consignments of mobile phones, Hammad said.

So far, there are around 18,000 phones which have been legalized by incoming international passengers including duty paid phones and those cleared under import baggage allowance after January 15, he said.

He said that there has been a misuse of data of incoming international passengers in connivance with some individuals. The FBR has identified a few individuals involved in identity theft and cases have been handed over to FIA for necessary action. The agency would take necessary action against the involved persons, he said.

The meeting was also attended by Nauman Khalid, Director Type Approvals at Pakistan Telecommunication Authority (PTA), and senior customs officials.

The facility of the legalization of imported mobile phones is only available to the international passengers under admissible baggage allowance as well as customs general order (CGO) 1 of 2019. The mobile devices will accordingly be cleared by the system with admissible allowances under the Baggage Rules, whereby the first mobile phone in a year will be allowed registration/whitelisting in DIRBS free of duty/taxes.

The names and data of the international passengers, entitled to baggage facility of one free phone without payment of taxes and duties under the Baggage Rules, have been misused. This is a data theft crime which should be handled by FIA.

The industry informed the minister about the issues and problems of issues of type approval of mobile phones in the country.

The issue of accurate customs valuation on the import of old and used mobile phones was also discussed during the meeting. Industry requested the minister that the director general Customs Valuation Karachi be called in Islamabad to address the issues of valuation of old and used phones. The issues of import duties should be resolved on top priority basis through a new customs valuation ruling.

Hammad issued orders on the spot to call the director general Customs Valuation Karachi next week to FBR House Islamabad for resolving valuation related issues of mobile phones.

He also constituted a four-member committee, comprising members from Karachi, Lahore, Rawalpindi, and Peshawar, which would coordinate with the minister of state on revenue for a quick resolution of the issues of mobile phone importers.