Taxes on Mobile Phones in Mini Budget 2019: Everything you need to know

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Mobile Phone Taxes and Import Duties in Pakistan 2019

Finance Ministed Asad Umar presented the ‘mini budget’ 2019. Among other things, the taxes on mobile phones have also been revised. Import duties and taxes on phones have been merged into a single tax.

Per new regulations, presented on January 23 2019, the smartphones are divided into different buckets. These are based on mobile price. Interestingly, the buckets are based on prices in USD, not on PKRs.

Cellular mobile phones or satellite phones to be charged on the basis of import value per set, or equivalent value in rupees in case of supply by the manufacturer. Here are the tax rates on mobile phones in Supplementary Finance Bill 2019.

Mobile Price in US DollarsRevised Tax, After Mini BudgetTax Before Mini Budget
Up to $30Rs. 150Nil
Above $30 but less than $100Rs. 1,470Nil
Above $100 but less than $200Rs. 1,870Rs. 500
Above $200 but less than $350Rs. 1,930Rs. 1,500
Above $350 but less than $500Rs. 6,000Rs. 3,500
Above $500Rs. 10,300Rs. 7,000

These revised taxes will certainly raise the prices of the phones, which have already witnessed steep increase after Government added import duty on carrying more than 2 smartphones for passengers flying in to Pakistan.

The minister also mentioned the taxes in his speech. Here are the numbers in Pak Rupees as described by Asad Umar:

  • Tax of Rs. 400 on mobiles priced Rs. 10,000
  • Rs. 4,000 on mobile phone of Rs. 28,000
  • Rs. 6,000 on mobile of Rs. 60,000
  • Rs. 8,000 on phone costing Rs. 105,000
  • Rs. 23,000 on phone worth Rs. 150,000
  • Rs. 41,000 on phones priced above Rs. 150,000

These are very high tax rates. Thankfully though, the taxes are not much high on low end phones. But there are very few smartphones that cost less than Rs. 10,000. So most of the people who purchase a smartphone, will have to pay a tax of at lease Rs. 4,000.

This could affect the sales of smartphones. There has been a decline in smartphone sales already due to import duties and a drop in value of the rupee. Whether government introduces any incentives for tax filers or not remains to be seen. But for now, the taxes on mobile phones are here to stay.

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