(Web Desk Monitoring) — The upcoming 2024-25 budget is expected to see an increase in duties and taxes on imported mobile phones for commercial purposes.

According to local media reports, the government is considering a strategy to distinguish between imported and domestically manufactured mobile phones to promote local production. Additionally, the proposed changes to the Mobile Device Manufacturing Policy may include the removal of the zero-rating on sales tax for mobile phone packaging.

Currently, sales tax is applied to Completely Built Units (CBUs) when they are imported or when International Mobile Equipment Identity (IMEI) numbers are registered by Cellular Mobile Operators (CMOs). This regulation also applies to imports in Completely Knocked Down/Semi Knocked Down (CKD/SKD) conditions and the distribution of locally manufactured mobile phones in CBU conditions.

The Federal Board of Revenue (FBR) has received a budget proposal from the Overseas Investors Chamber of Commerce and Industry (OICCI), which advocates for the removal of the advance tax rate imposed on telecom consumers. The OICCI argues that many telecom users are below the taxable income threshold, and this tax hinders the affordability of mobile services. In its tax recommendations for the 2024-25 budget, the OICCI also calls for improvements to the withholding tax system to make tax claims and verifications more transparent and less burdensome.

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