Key Points
- National Assembly Standing Committee recommends tax cut
- Federal Board of Revenue pleads with no fiscal space
- Focus: rationalisation, not reduction or abolition
- Final decision pending budget
ISLAMABAD: Pakistan’s Federal Board of Revenue (FBR) is reviewing the country’s taxation structure on imported smartphones after lawmakers in the National Assembly Standing Committee on Finance pressed for rationalisation measures in the upcoming budget cycle.
According to parliamentary proceedings and official briefings, the review comes amid growing concerns over high smartphone prices.
The prices in Pakistan are driven by a multi-layered tax regime that includes customs duty, regulatory duty, sales tax and withholding tax, significantly pushing up retail costs of imported devices.
Parliamentary committee discussions have urged tax authorities to examine options to simplify the structure and reduce pricing distortions. They are concerned, particularly about mid-range smartphones, which are widely used for digital services and connectivity.
However, officials have not presented any final quantified proposal for tax cuts, and no changes have been included in the Finance Bill so far. FBR officials have also indicated limited fiscal space for broad reductions in sales tax or withholding tax rates.
Instead, the current work focuses on “rationalisation” of existing levies, which could include adjustments to customs valuation rules and duty slabs rather than a straight reduction in overall taxation.
Industry stakeholders and lawmakers have argued that smartphones should be treated as essential digital tools rather than luxury goods, citing their importance in education, business, and financial inclusion.
Despite political calls for relief, any actual price reduction will depend on final budget approval and whether the government opts for structural changes or maintains revenue-neutral adjustments.
For now, the process remains at a consultation and review stage rather than a final policy decision.
