The Federal Board of Revenue (FBR) dropped a bombshell earlier this year when it announced heavy duties on mobile phones that were being imported or being brought back by citizens after buying them abroad. The heavy taxation on those smartphones increased their prices by more than 30% in some cases making it difficult for people to bring in phones from other countries. But now the regulatory body has announced that it is planning to cut down the regulatory duty on imported mobile phones by up to 50% in order to provide relief to the common man so that people can buy phones at lower prices, specifically keeping in mind that the prices of mobile phones are now talking to sky.
The regulatory body believes that by reducing the import duty on mobile phones, the government will be able to earn more revenue due to increase in volume. The reduced rate will mean that there will be higher imports in the sector and thus the government will get a good chance to earn higher revenue from the duties. Duties were reduced on mobile phones in the last budget and this further decrease will also help in the increase in the import of phones. The highest change will be in the category of $100 to $200 phones where the regulatory duty will be reduced from the current Rs. 2,430 to 1,200. The table below shows the new regulatory duties and the existing regulatory
|Mobile Phone Value in $||Current Regulatory Duty in PKR||Proposed Regulatory Duty in PKR|
|Up to 30||165||165|
|Above 30 and up to 100||1,620||1,000|
|Above 100 and up to 200||2,430||1,200|
|Above 200 and up to 350||3,240||2,500|
|Above 350 and up to 500||9,450||5,000|
While the news of a reduction in the duties on imported mobile phones is a welcoming one, it will also serve as a serve as backlash for the local mobile phone companies. People who are investing in setting up local mobile phone assemblies will be at a disadvantage as prices of imported phones may go down due to a reduction in the regulatory duties.