The Senate Standing Committee on Cabinet Division was told that Pakistan’s mobile phone registration system does not itself distinguish between new and used phones when determining tax, while the Federal Board of Revenue (FBR) is responsible for mobile phone taxes.
PTA Member Enforcement Dr. Khawar Siddique Khokhar told the committee that a mobile phone is registered once it connects to a Pakistani mobile network. He clarified that the Pakistan Telecommunication Authority (PTA) does not impose or collect taxes on mobile phones.
FBR officials said the previous federal budget introduced a 20% annual reduction in customs duty on mobile phones, with the reduction scheduled to continue until 2030.
Officials explained that customs uses different valuation mechanisms for new and used phones and calculates the applicable duties under Article 25 of the Customs Act.
Dr. Khawar said the FBR determines the tax associated with a mobile phone through its IMEI number, while the registration system itself does not classify the device as new or used.
However, customs officials can determine whether phones are new or used when inspecting commercial consignments imported in containers. This means the applicable tax can differ depending on the customs assessment of the imported phones.
The committee was also informed that Pakistan is manufacturing mobile phones locally, but batteries and casings are still not being produced domestically at the required level.
Dr. Khawar said the Engineering Development Board is working on a new policy for the mobile phone industry.
The committee chairman said the GSMA had warned that Pakistan’s existing mobile phone taxes could create problems for the country’s 5G rollout.
Dr. Khawar also said millions of phones with fake IMEI numbers had been blocked. He again clarified that mobile phone taxes are collected by the FBR rather than the PTA.
FBR officials further explained that although the FBR collects the taxes, the National Tariff Commission determines the tariff.
Dr. Khawar said the PTA had repeatedly called for mobile phone tax rationalisation. The committee chairman noted that overseas Pakistanis were now relieved that people were no longer routinely asking them to bring mobile phones from abroad.
