Mobile phone taxes are facing heavy scrutiny over a system disconnect between PTA and FBR following a meeting of the Senate Standing Committee on Cabinet Secretariat. Federal Minister for Information Technology and Telecommunication Shaza Fatima Khawaja revealed a massive statistic during the session. She stated that 93% of mobile phones used in Pakistan are now manufactured locally.
Consequently, these locally produced handsets easily avoid the taxes imposed on imported devices. Furthermore, the minister clarified that devices brought into Pakistan from abroad do not actually constitute large-scale imports.
Many consumers worry that heavy taxation might delay next-generation connectivity. However, Shaza Fatima quickly dismissed these concerns. She stated that Federal Board of Revenue (FBR) taxes do not affect the introduction of 5G technology in the country.
Moreover, the import of 5G-compatible smartphones is not the primary issue at hand. To further facilitate consumers, the prime minister has stepped in. He recently directed the government to formulate a new policy that will allow buyers to purchase mobile phones on easy installments.
Despite these positive developments, a glaring disconnect exists between government departments. FBR officials informed the committee that they determine applicable taxes based on a phone’s model and storage capacity.
Unfortunately, the Pakistan Telecommunication Authority (PTA) operates a system that simply does not provide the model of a mobile handset. This technical limitation from the side of PTA severely complicates how the FBR identifies mobile phones and devices for taxes.
Meanwhile, Shaza Fatima reiterated that the authority to adjust taxes on products rests solely with the Tax Policy Office. She subsequently proposed summoning officials from the Tax Policy Office to brief the committee and explain their taxation mechanism and its impact on consumers.
