FBR Reduces Mobile Phone Taxes by 60% in Pakistan

In a significant development, the Federal Board of Revenue (FBR) has rolled out changes in its valuation ruling, ushering in a wave of relief for overseas Pakistanis while maintaining the status quo for commercial importers within the mobile phone sector.

Under the newly enacted Valuation Ruling Number 1834 of 2023 by the Directorate of Valuation Karachi, international passengers, particularly overseas Pakistanis, stand to benefit from an uplift in depreciation rates, reshaping the landscape for mobile phone imports.

The ruling introduces a remarkable depreciation allowance of up to 60 percent on used or refurbished mobile phones, marking a substantial concession for individuals importing devices aged up to five years.

However, the tide does not bring the same fortune for commercial importers of new mobile phones. The revised valuation ruling offers no concessions for this group, with duties and taxes imposed based on comparatively higher customs values. The assessment criteria have also expanded to include additional models.

The FBR’s latest decision encompasses an extensive list of brands and models for duties and taxes assessment. For models not covered in the ruling but imported in commercial quantities, clearance collectorates advised to assess them under Section 81 of the Customs Act, 1969. Subsequently, a reference will forwarded to the Directorate for the final determination of values.

Beyond the surface, the new policy aims to curb under-invoicing margins, particularly for existing and new models of branded mobile phones. This proactive initiative anticipated to boost transparency and streamline the valuation process for imported mobile devices.

Reactions to the FBR’s decision have mixed. Overseas Pakistanis are expressing relief at the increased depreciation rates, viewing it as a positive shift. However, commercial importers are grappling with ongoing challenges stemming from higher customs values.

The true impact of these changes on the mobile phone market is yet to unveiled as stakeholders delve into the broader implications of the FBR’s latest valuation ruling. The dynamic shift in favor of overseas Pakistanis sets the stage for a transformed landscape, sparking curiosity and anticipation within the industry.