Pakistan’s National Assembly has integrated amendments into the Finance Bill for the next fiscal year to partially reduce taxes on imported mobile phones, a Pakistani lawmaker said on Sunday. The legislative adjustments follow a lengthy parliamentary debate after the initial federal budget draft omitted recommended reforms to the country’s heavily taxed telecommunications sector. While the amendments fell short of the sweeping tax rollbacks initially sought by a parliamentary panel, they mark a policy shift toward easing the burden on mobile users, according to Member of National Assembly (MNA) Kasim Gilani.
Lawmaker acknowledges relief is insufficient
“We understand that this is insufficient, but still, whatever has been achieved, let’s take this for this year,” Gilani told Arab News. “Next year, we will make further reductions.” The amendments target a heavily layered tax infrastructure that has historically driven up the cost of legal mobile imports. Prior to the revisions, a combination of General Sales Tax (GST), Regulatory Duty (RD), Mobile Device Levy, and Withholding Tax generated a cumulative fiscal burden of 63 percent on a device’s baseline value.
Tax burden on mobile phones
“If a phone costs 200,000 rupees ($720), the tax on it right now was 106,000 rupees to be exact,” Gilani said, adding that the parliamentary finance committee had recommended in March that handsets be treated as a necessity rather than a luxury asset. When the primary budget bypassed these recommendations earlier this month, lawmakers utilized amendment provisions to challenge the statutory 25 percent luxury GST rate and associated import barriers. Following a long debate, the Federal Board of Revenue (FBR) accepted modifications to the final Finance Bill text.
Key amendments: Regulatory duty cut and mid-tier relief
The government agreed to cut the Regulatory Duty on all imported smartphones by 20 percent, according to Gilani. Secondly, the FBR accepted an amendment targeting the mid-tier import bracket, specifically devices valued between $200 and $300, which includes highly saturated market segments. The concession will carry a fiscal impact of roughly up to Rs1 billion ($3.6 million) in state revenue. Top-tier smartphones valued above $500 remain bound to the maximum 25 percent luxury GST schedule, with the 20 percent reduction in regulatory duty serving as their sole fiscal relief in the current budget cycle.
Proposal for installment payments for device registration
To address the millions of handsets operating outside the legal cellular network, lawmakers suggested a change in the Pakistan Telecommunication Authority’s (PTA) registration framework, allowing users to pay fees in installments. Under the proposal, consumers who cannot afford to pay the hefty registration fees upfront via the Device Identification, Registration, and Blocking System (DIRBS) can spread the tax payments across monthly cycles. “Whichever month they fail to pay the instalment, the PTA can block their device that month,” Gilani suggested, saying a small penalty should apply for re-activation. “Ensure this plan so that more people will come into the tax net, get their devices registered.”
