The Federal Board of Revenue (FBR) is formulating a detailed proposal to rationalise duties and taxes on imported mobile phones, amid increasing pressure from policymakers and industry stakeholders to ease cost burdens on consumers and telecom operators.

According to official sources, the proposal is being drafted for submission to the National Assembly Standing Committee on Finance, which has recently questioned the sustainability of existing tariff structures.

During earlier consultations, Cellular Mobile Operators (CMOs) urged the government to withdraw regulatory duties on telecom power equipment that is not manufactured locally and rationalise duties on imported network hardware. They also argued that the telecom services sector should be excluded from the retail price list, as operators do not import consumer devices for direct sale.

FBR officials acknowledged that tax rates on mobile phone imports require review and confirmed that further consultation will be held with the Pakistan Telecommunication Authority (PTA) and other relevant bodies.

Data shared by the FBR shows that Rs82 billion in taxes was collected on imported mobile phones during FY2024-25, including Rs18 billion from high-end smartphones, representing roughly 23–24% of total handset-related receipts.

In contrast, mobile devices imported in CKD/SKD kit form and assembled locally are subject to only 5% duty, and several domestic assembly plants are producing smartphones priced as low as Rs15,000.

Tax authorities noted that where customs valuation exceeds prevailing market prices, adjustments may be made, adding that declining smartphone prices could justify closer coordination with the Ministry of IT to ensure tax assessments align with market trends.

The matter also drew strong criticism during a recent meeting of the National Assembly committee, where members argued that heavy duties have pushed even mid-range smartphones out of reach for consumers. Lawmakers stressed that mobile phones have become a basic necessity, and that the long-standing justification of being “under an IMF programme” could no longer be used to defend excessive taxation.

Committee chairman Syed Naveed Qamar directed the FBR and the Tax Policy Office to present a comprehensive roadmap for reducing the tax burden, including a review of duties applied under the personal baggage and registration system.

Officials from the PTA clarified that the authority does not impose any direct taxes and that all levies are collected by the FBR. They added that 94% of smartphones in Pakistan are now locally assembled, while only 6% primarily high-end models are imported. Tax officials noted that major global smartphone brands (excluding Apple) are already being manufactured domestically.