Govt Plans 20% Excise Duty on Imported Mobile Phones

The federal government is planning to impose a 20 percent federal excise duty on imported mobile phones as part of a new policy aimed at boosting local manufacturing and achieving up to $400 million in exports of refurbished phones.

The proposed measures are part of the Mobile and Electronics Manufacturing Framework finalized by the Engineering Development Board, which will be submitted to Prime Minister Shehbaz Sharif for approval, reported Express Tribune.

The authorities are considering imposing a 20% federal excise duty on the import of completely built-up units (CBU) of mobile phones, a move that would mark a significant shift in taxation policy. Currently, no federal excise duty is levied on the import of fully assembled handsets.

Under the plan, a 10 percent customs duty will also be imposed on fully built units of laptops, desktops, and tablets, while duties on completely knocked down units will start at 5 percent and gradually increase to 10 percent.

The framework also includes setting up a Rs. 56 billion technology investment fund to support local manufacturing of mobile phones and electronic devices.

A key component of the policy is the re-export of refurbished mobile phones and laptops, with an estimated 30 to 40 million devices expected to be processed annually, generating between $300 million and $400 million in export revenue.

To support this, the government plans to establish dedicated refurbishment facilities within export processing zones, operating under strict customs supervision with controls such as IMEI registration and time-bound re-export requirements.

Two important models are being considered. One allows temporary import without foreign exchange payments backed by bank guarantees, while the other permits regular commercial imports followed by refurbishment and export under bonded schemes.