ISLAMABAD: The forthcoming 2024-25 budget is anticipated to witness an escalation in duties and taxes on imported mobile phones for commercial purposes.
According to media reprots, the government is contemplating a strategy to distinguish between imported and domestically manufactured mobile phones to bolster local production. Moreover, there is a likelihood of abolishing the zero rating on sales tax for mobile phone packaging under the proposed revisions in the Mobile Device Manufacturing Policy.
Presently, sales tax is levied on Completely Built Units (CBUs) upon importation or registration of International Mobile Equipment Identity (IMEI) numbers by Cellular Mobile Operators (CMOs). This regulation extends to imports in Completely Knocked Down/Semi Knocked Down (CKD/SKD) conditions and the distribution of locally manufactured mobile phones in CBU conditions.
The Federal Board of Revenue (FBR) has been presented with a budget proposition from the Overseas Investors Chamber of Commerce and Industry (OICCI), advocating for the elimination of the advance tax rate imposed on telecom consumers. OICCI contends that a significant portion of telecom users falls below the taxable income threshold, and this tax acts as a barrier to the affordability of mobile services. In its tax recommendations for the 2024-25 budget, OICCI also suggests enhancements to the withholding tax system to facilitate more transparent and less burdensome tax claims and verifications.
