The Federal Board of Revenue (FBR) has collected Rs. 231 million on the import of 120,741 mobile phones from January 15, 2019 to July 15, 2019 under the traveler baggage scheme.
According to the data presented by the FBR before the Senate Standing Committee on Information Technology and Telecommunications, a total of 715,990 duty-free mobile phones were imported from January 15, 2019 to July 15, 2910.
FBR’s data revealed that six slabs of duties and taxes are applicable on the import of mobile phones under the baggage scheme in the Finance Act 2019.
In light of the federal cabinet’s decision as of January 15, 2019, a total of 357 million IMEIs — that were previously unregistered with PTA — were converted to compliant and registered status.
All devices that connected to any mobile network after January 15, 2019 were required to be registered within 60 days from when first seen on any mobile network.
A total of 10,273,531 devices seen on the network were blocked on a rolling basis upon the lapse of 60 days warning period. Prior to blocking, as per SOP, an SMS was sent to consumers informing them about their device’s unregistered status and warning them about the device being blocked.
The data revealed that the fixed tax rates, as per Finance Act 2019, are as following:
- Mobile phone having a value of up to US $30: Rs. 300
- Mobile phone with a value between US $30-100: Rs 2,940
- Mobile phone valued between US $100-200: Rs 4,510
- Mobile phone valued between US $202-350: Rs 6,180
- Mobile phone valued between US $350-500: Rs 17,650
- Mobile phone valued between above US $500: Rs 31,250
This essentially means that if a phone is priced at $750, a fixed tax rate of Rs. 31,250 will be deducted to get such a phone activated in Pakistan.
Earlier this month, single phone allowance under the baggage scheme was withdrawn and now all phones brought to Pakistan by expats — after July 1st 2019 — must be registered with DIRBS after paying applicable taxes.
It must be mentioned here that international travelers usually bring used phones with them, i.e. the face value of phones is less than what’s registered with the FBR and hence they are taxed the same as new phones i.e. higher than the phone’s real value.
An older iPhone model, for instance, could be priced with FBR at more than $500 and hence same tax slab will be applied. In reality, the phone could be of much lesser value due to depreciation in price over the years or because the phone is used and not new.
FBR is yet to devise a way to tax such used phones — that come with a lower price tag and must be taxed at a lower rate.