The National Assembly’s Standing Committee on Finance and Revenue, during a meeting held to review the collection of duties and taxes on mobile phones, recommended reducing the heavy tax burden imposed on smartphones, particularly high-end devices.
The committee received a detailed briefing from Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial and senior officials regarding the current taxation framework on mobile phones.
Officials informed lawmakers that mobile phones priced above $500 currently face taxes reaching as high as Rs. 76,000. The effective tax rate on imported devices in this category stands at around 54 percent, while phones priced between $700 and $750 attract approximately 55 percent taxation.
Members of the committee expressed concern over the steep duties, noting that excessive taxation discourages technology adoption and promotes informal markets. The committee formally recommended that the government reduce mobile phone taxes and review the existing policy in the upcoming federal budget.
Officials from the Tax Policy Office assured lawmakers that the proposal would be considered during preparations for the next fiscal year’s budget. However, they clarified that there is currently no room to reduce the 18 percent General Sales Tax (GST) or the applicable withholding tax due to revenue constraints.
According to the briefing, an 18 percent GST is imposed on mobile phones, along with concessional income tax and a withholding tax of around Rs. 11,500 on expensive devices. Authorities also highlighted that locally manufactured phones benefit from lower taxation compared to imported models.
FBR officials stated that while imported phones face an effective tax burden of about 54 percent of their price, locally assembled devices are taxed at nearly 25 percent to encourage domestic manufacturing.
During the discussion, committee member Syed Naveed Qamar argued that once sales tax is applied to mobile phones, additional income tax becomes unnecessary. He stressed that access to modern technology is essential for economic growth and urged the government to present a clear and transparent mobile taxation policy in the next budget.
The meeting concluded with lawmakers emphasizing that rationalizing smartphone taxes could help expand digital inclusion, curb smuggling, and support Pakistan’s broader economic modernization efforts.
