Experts Ask for a New Strategy to Tax Imported Mobile Phones

The Federal Board of Revenue (FBR) has received proposals to restore the facility of one duty-free handset in a calendar year under gift/personal baggage scheme and reduce tax slabs on all categories of Mobile Phones brought into the country to encourage penetration of smartphones.

FBR has sought budget proposals for the next fiscal year and the telecom sector is also actively approaching the Board for consideration of viable tax proposals and policy changes in the telecom sector specifically to deal with the negative implications of the Device Identification, Registration & Blocking System (DIRBS).

Experts in one of the leading telecom companies proposed that the government should devise a strategy for depreciating the value of mobile handsets and revise the tax slabs accordingly as is the case of other imported items.

As per the Prime Minister’s vision of facilitating expatriate Pakistanis, the government should reinstate one duty-free handset in a calendar year under the gift/personal baggage scheme.

As more devices are registered, the government will be able to increase its pool of taxes. This will also curb the menace of street crimes in the country as the government will have increased the availability of data regarding mobile phones.

Pakistan Telecom Authority (PTA) had enforced the implementation of Device Identification, Registration & Blocking System (DIRBS) on all cellular mobile operators.

The DIRBS system intends to verify, detect and discourage illegal, non-compliant, non-tax paid handsets and devices by authenticating currently active devices on cellular networks and ensuring continuous monitoring as new devices are activated.

An Overseas Pakistani/Foreign traveler residing in Pakistan for more than 60 days using a Pakistani network SIM has to pay all taxes related to their mobile handset.

After the implementation of DIRBS, many problems have surfaced, which include high taxation, negative impact on used handset retail industry and affordability of handsets/IoT devices by common Pakistani which is hampering Prime Minister’s Digital Pakistan vision.

Second-hand Mobile Phone Sales Declining

The business of second-hand mobile phones has also tremendously declined because some of these phones can only work with registered SIMs thus without the registered SIM their value.

Second-hand mobile phones were available at cheap rates; therefore, it was easier for a lower/middle class to buy them but now one is apprehensive about buying these phones because the IMEI number may be tampered.

  • Digitization is against the interest of the military and the civilian political elite. With digitization people are exposed to the opinions of Pakistan’s friends *and* Pakistan’s enemies. People can discuss things freely and organize online. People can earn money without needing favours from the elite by tapping overseas and local markets via digital channels. All these things erode the stranglehold of the military on the people of Pakistan. So that is why we have taxes on mobile phones, inconsistent policies that dissuade investors, and the world’s highest tax burden on telecoms and internet access. The internet is a huge danger to our masters.

    • Military is already working on twitter. so they have no problem with it. however the mafias and mullahs of the country do have a serious fear from the digital Pakistan thingy. Huge tax burden is all because of IPPs and other loss making enterprise which leaves no other reason for the government to borrow from the IMF and tax the public according to IMF dictation.

  • You mean DIRBS backfired? Shocking, who could’ve known that!?

    The answer is everyone. Everyone knew that and warned PTA against ridiculous taxes from the start.

    • I will say the problem was because there are many factors…. first they should have a roaming or the network name should be something temporary so that people should know at first glance that the phone is registered or not. secondly the amount of tax on phones was huge and there was no check about real time prices of phones. The phones get half priced nearly after 6 months or so or due to lack of features or bad reviews.

    • they should be banned from holding foreign nationality and their children should never be sent abroad when they are on the job

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