Imported High-End Phones to Become Rs. 14,000 Cheaper From July 1

The government has reduced the regulatory duty on imported mobile phones by 20 percent in the 2026-27 budget.

FBR Chairman Rashid Mahmood Langrial informed the National Assembly Standing Committee on Finance that the 20 percent reduction in regulatory duty on high-end imported phones will take effect from July 1, 2026, providing relief of Rs. 14,000 per phone. He said this relief is part of the overall duty reductions under the tariff rationalization policy.

Sharing recommendations on the Finance Bill 2026, the FBR chairman requested that the existing tax structure on imported mobile phones be maintained, saying it is progressive, equitable over a realistic horizon, and revenue-buoyant. He said no restructuring of rate bands is warranted.

Rejecting across-the-board or top-tier import duty cuts, the FBR chairman said premium imports account for the bulk of import revenue and are purchased by the most affluent consumers; therefore, relief in that segment would amount to a regressive and costly transfer.

Around 95 percent of the phones used in Pakistan are locally assembled, while only 5 percent are imported.

The FBR chairman recommended that if any relief is to be provided on imported mobile phones, it should be confined strictly to the entry segment of $31 to $200. He said this is the only segment where a concession would reach price-sensitive first-time buyers at a low revenue cost.

He added that the 95 percent local share is the real driver of affordable access for the young population and that component-stage concessions under the CKD/SKD regime should be preserved as the route to lower mass-market prices.

According to the latest import data, the number of mobile phone units imported into Pakistan increased by 61 percent during the year, rising from 0.64 million to 1.04 million units.

The import value more than doubled, rising by 137 percent, while duty and tax collection from imported mobile phones surged by 136 percent to Rs. 36.9 billion.

The data showed that the growth was mainly driven by higher-value smartphones, while the only declining segment was sub-$30 feature phones, as consumers shifted towards smartphones, the FBR chairman said.

The figures indicate that the existing import duty structure has supported a revenue-generating market rather than restricting imports, with the tax burden increasing in line with the value of devices.

The report further stated that within the imported segment, taxation rises with device value, while the overall burden on households remains modest and evenly distributed across segments.

The FBR chairman said reducing import duties on premium mobile phones would mainly benefit high-income consumers while causing a significant loss of government revenue. Flagship smartphones priced above $500 account for only 16 percent of imported units but contribute 58 percent of total import tax revenue, generating Rs. 21.6 billion out of the total Rs. 36.9 billion collected at the import stage.

He said these devices are purchased predominantly by the highest-income segment of society.

Any reduction in duties on top-tier imported phones would effectively transfer revenue benefits to affluent buyers while offering little or no advantage to the broader market, around 95 percent of which is served by locally assembled mobile phones, the FBR chairman added.