Consumers hoping for cheaper smartphones will have to wait. The government has officially ruled out any further tax relief or reductions on imported mobile phones. Consequently, the relief announced in the 2026-27 budget remains final for now.
In a written reply to the National Assembly today, October 14, 2026, Finance Minister Senator Muhammad Aurangzeb clarified the government’s stance. He stated that the government has already implemented all approved tax measures under the Finance Act 2026. Therefore, officials are not considering any additional changes to mobile phone import taxation.
Tax Relief on Imported Mobile Phones Already Implemented
The government acknowledges the public’s demand for a rational taxation regime. Therefore, it introduced specific relief measures to promote digital inclusion. Specifically, the government reduced the income tax on cellular phones valued between $100 and $200. This tax dropped significantly from Rs930 to just Rs100. Furthermore, authorities cut the mobile handset levy from Rs600 to Rs200.
In addition, the government revised the overall rates for the Mobile Handset Levy and Regulatory Duty. Aurangzeb highlighted that officials finalized these decisions after extensive consultations. During the 2026-27 budget-making process, the National Assembly Standing Committee on Finance and Revenue examined the issue at length. Moreover, policymakers consulted various sectors, including the information technology industry.
No Future Tax Reductions Planned
Currently, duties and taxes drastically increase the cost of legally imported handsets. Consumers and tech advocates consistently argue that lower taxation could improve affordability and access to digital services. However, further changes also carry serious implications for government revenue. Because of this balance, the government considers the existing measures sufficient to fulfill its budget commitments. Meanwhile, the minister did not specify any separate timeline for future reviews.
While smartphone buyers might feel disappointed, the government has provided broader support for digital services. Most notably, authorities extended the 0.25 percent income tax rate on IT service exports until 2029. This extension successfully addresses a major demand of the IT industry.
Additionally, the Finance Act 2025-26 previously capped income and sales taxes on digitally acquired services and supplies. These taxes now sit at a maximum of two percent. The government maintains that all budget measures have now taken effect. Ultimately, this leaves no room for further mobile phone tax adjustments at present.
