Rs 231 million was collected by the FBR (Federal Board of Revenue) under the Finance Act’s 2019 traveler baggage scheme. This happened during the period 15 January 2019 to 15 July 2019 for the importation of 21,741 cellular phones.
As based on the information which the FBR presented to the Senate Standing Committee on Information Technology & Telecommunications, 715,990 mobile phones were imported duty-free in the above-mentioned period.
The information of the FBR disclosed that 6 slabs regarding taxes & duties are relevant to the importation of mobile phones as per the Finance Act’s 2019, traveler baggage scheme.
A quantity of 357-million IMEI’s which were unregistered with the PTA had been modified to be compliant with registered status, in accordance with a decision taken by the federal cabinet as from 15 July 2019.
After 15 January 2019, all devices which were connected to a mobile network, were needed to be registered in 60 days from initially observed on all mobile networks in the country.
A number of 10,273,531 devices monitored on the network, got blocked on a revolving basis after the passage of the warning period of 60 days.
Before the blocking, as per Standing Operating Procedures, all customers received an SMS which informed them regarding their unregistered devices, whilst warning them that such a device will be blocked.
According to the data, fixed tax rates, under the Finance Act 2019, will be as mentioned below:
Value of Mobile Phone and Tax Rate
Value of Phone Applicable Tax:
$30 Rs 300
$30 to $100 Rs 2,940
$100 to $200 Rs 4,510
$202 to $350 Rs 6,180
$350 to $500 Rs 17,650
$500 Rs 31,250
This basically means that for a phone of $750, Rs 31,250 will be deducted as a set tax-rate, in order to get the phone initiated in Pakistan.
Earlier during July, the single phone allocation was withdrawn, as per the baggage scheme. Thus, all mobile phones Pakistani expats brought home, have to be registered as from 1 July 2019, with DIRBS, after the payment of the relevant taxes.
It must be stated here that usually international travelers bring used phones into the country. In other words, the phones’ face value is lower than the FBR-registered phones.
However, they have to pay the same tax rate applicable to new phones, which is higher than the real value of the phone.
For example, a previous model iPhone could be priced over $500 with the FBR. However, the tax slab will turn out to be the same.
The phone’s value could be much lower because of the depreciation in its price during the years, on the other, the phone is not new, but used.
The FBR still has to formulate a method to tax used phones at a lesser rate as it comes with a cheaper price tag.