Experts Ask for a New Strategy to Tax Imported Mobile Phones

Experts Ask for a New Strategy to Tax Imported Mobile Phones

The Federal Board of Revenue (FBR) has received proposals to restore the facility of one duty-free handset in a calendar year under gift/personal baggage scheme and reduce tax slabs on all categories of mobile phones brought into the country to encourage penetration of smartphones.
FBR has sought budget proposals for the next fiscal year and the telecom sector is also actively approaching the Board for consideration of viable tax proposals and policy changes in the telecom sector specifically to deal with the negative implications of the Device Identification, Registration & Blocking System (DIRBS).
Experts in one of the leading telecom companies proposed that the government should devise a strategy for depreciating the value of mobile handsets and revise the tax slabs accordingly as is the case of other imported items.
As per the Prime Minister’s vision of facilitating expatriate Pakistanis, the government should reinstate one duty-free handset in a calendar year under the gift/personal baggage scheme.
As more devices are registered, the government will be able to increase its pool of taxes. This will also curb the menace of street crimes in the country as the government will have increased the availability of data regarding mobile phones.
Pakistan Telecom Authority (PTA) had enforced the implementation of Device Identification, Registration & Blocking System (DIRBS) on all cellular mobile operators.
The DIRBS system intends to verify, detect and discourage illegal, non-compliant, non-tax paid handsets and devices by authenticating currently active devices on cellular networks and ensuring continuous monitoring as new devices are activated.
An Overseas Pakistani/Foreign traveler residing in Pakistan for more than 180 days using a Pakistani network SIM has to pay all taxes related to their mobile handset.
After the implementation of DIRBS, many problems have surfaced, which include high taxation, negative impact on used handset retail industry and affordability of handsets/IoT devices by common Pakistani which is hampering Prime Minister’s Digital Pakistan vision.
Second-hand Mobile Phone Sales Declining
The business of second-hand mobile phones has also tremendously declined because some of these phones can only work with registered SIMs thus without the registered SIM their value.
Second-hand mobile phones were available at cheap rates; therefore, it was easier for a lower/middle class to buy them but now one is apprehensive about buying these phones because the IMEI number may be tampered.

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