Taxes on high-end phones affect only 5% users, says FBR chairman

• Premiums on the latest models go up to Rs 150,000.
• Imported phones are taxed under the current regime.
• A report on the matter is expected by March before the NA.

The Federal Board of Revenue (FBR) said taxes on expensive, imported mobile phones affect only a small section of consumers, noting that premiums on new high-end models come to around Rs 150,000.

“This is only a 5% customer issue,” FBR chairman Rashid Langrial told the Senate Standing Committee on Finance, which was deliberating on a petition filed by the Federation of Chambers of Commerce and Industry in Islamabad.

Langrial said 95% of mobile phones in the country are now manufactured locally, adding that only imported devices face the current tax structure.

He noted that consumers who already pay high premiums for luxury models should have no trouble paying the taxes owed. “The problem is entirely with high-end phones. If someone can pay Rs 150,000 premium, why can’t they pay tax?” he noticed.

The FBR chief reiterated that the taxes apply to imported phones, not local ones, and that concerns raised by industry stakeholders will be looked into in detail.

He assured the committee that the revenue authority would submit its report on the matter to the National Assembly by March and the same findings would also be shared with the committee.

During the National Assembly Standing Committee on Finance a day earlier, PPP MNA Qasim Gillani said there is too much tax on smartphones as they already cost too much and are beyond the reach of the public.

The MNA added that people were even forced to pay taxes again if their phones were stolen.

FBR chairman Langrial had told the committee that prices of many major brands had come down, but he acknowledged valuation concerns. “If the FBR rate is higher than the market rate, it will come down,” he assured.

Tax officials added that the duties were levied on the price of the phone and not the model. Revenue officials said mobile phones contributed Rs 82 billion in revenue last financial year.