A National Assembly Standing Committee on Finance has called for a comprehensive review of the current taxation regime on mobile phones, raising concerns over its impact on affordability and access to digital services. The committee, chaired by MNA Naveed Qamar, observed that the existing structure places a significant financial burden on consumers and may be limiting the adoption of modern communication technologies across the country.
During the briefing, officials informed the committee that mobile phones are subject to multiple layers of taxation, including an 18 percent general sales tax along with income tax and withholding tax components. Members noted that the income tax applied on mobile devices was effectively being treated as an additional sales tax, prompting the committee to seek a detailed review of the policy rationale and its broader economic implications. The panel has requested authorities to provide a written explanation outlining revenue considerations and policy objectives behind the current tax framework.
The discussion also highlighted the high cumulative tax burden on imported smartphones, particularly in the premium category. Devices priced above 500 dollars reportedly face an overall tax incidence of around 54 percent, with slightly higher rates for devices in the 700 to 750 dollar range. In contrast, locally assembled or manufactured devices are taxed at comparatively lower rates of around 25 percent, reflecting an existing policy tilt toward encouraging domestic production.
Committee members stressed the importance of making digital devices more accessible, noting that mobile phones are essential tools for economic participation, financial inclusion, and access to online services. The panel recommended that the taxation structure be reassessed to ensure fairness, improve affordability, and support the broader objective of digital inclusion. Officials from the Federal Board of Revenue indicated that the matter could be considered during the upcoming federal budget process, though they maintained that there is currently limited room to reduce certain tax components such as general sales tax and withholding tax.
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