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Pakistani panel seeks review of high mobile phone taxes
🇵🇰 Pakistan /Economy & Trade

Pakistani panel seeks review of high mobile phone taxes

From Dawn · (6d ago) English

Translated from English, summarized and contextualized by DistantNews.

TLDR

  • A Pakistani parliamentary committee recommended reducing taxes on mobile phones to improve affordability and support local manufacturing.
  • The National Assembly Standing Committee on Finance questioned the high tax burden, including income tax treated as sales tax and high SMS alert charges.
  • Officials briefed the committee on the current taxation structure, noting imported phones face around a 54% tax rate, while locally assembled devices are taxed at about 25%.

From the perspective of Dawn (Pakistan), the National Assembly Standing Committee on Finance's call for a review of high mobile phone taxes is a crucial step towards making technology more accessible for ordinary Pakistanis. The committee, led by MNA Naveed Qamar, rightly pointed out the disproportionate tax burden, particularly the treatment of income tax on mobile phones as a sales tax, which adds to the cost of essential communication devices.

income tax on mobile phones was effectively being treated as a sales tax

— National Assembly Standing Committee on FinanceThe committee observed the tax treatment of mobile phones and directed authorities to review the practice.

Our reporting highlights the committee's directive to the Ministry of Finance's Tax Policy Office to submit a detailed report on the taxation of both imported and locally manufactured phones. This move is vital for understanding the revenue implications and policy objectives behind the current regime. The FBR Chairman's briefing revealed that imported phones above $500 face a staggering tax of around Rs76,000, an effective rate of 54%, while locally assembled devices are subject to a lower rate of roughly 25%. This disparity needs urgent attention.

recommended a reduction in mobile phone taxes

— National Assembly Standing Committee on FinanceFollowing a briefing by FBR officials, the committee made its recommendation.

Dawn believes that promoting access to modern technology is not just about affordability; it's fundamental to economic growth. The committee's recommendation for a reduction in mobile phone taxes, while acknowledging the 18% GST and withholding taxes, signals a recognition that the current structure hinders progress. We support the call for a review to ensure equity, enhance affordability, and bolster local manufacturing, as outlined by the committee's recommendations concerning CBU, CKD, and SKD categories, and exemptions under the Income Tax Ordinance, 2001, and Baggage Rules, 2006.

the matter would be reviewed during the upcoming fiscal year budget process

— Tax officialsOfficials assured the committee that the issue of mobile phone taxes would be considered in the next budget.

This issue resonates deeply within Pakistan, where mobile phones are a primary means of communication and access to information for a vast majority. Unlike in some Western countries where multiple high-speed internet options are readily available, for many Pakistanis, a mobile phone is their only gateway to the digital world. Therefore, making these devices more affordable is not just an economic issue, but a matter of digital inclusion and empowering our citizens.

promote access to modern technology, saying it was vital for economic growth

— Naveed QamarMNA Naveed Qamar stressed the importance of technology access for economic development.
DistantNews Editorial

Originally published by Dawn in English. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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