ISLAMABAD: The federal government is considering imposing a 20 percent federal excise duty on imported mobile phones as part of a broader policy framework aimed at encouraging domestic manufacturing and generating up to 400 million dollars in annual exports through refurbished devices. The proposal is included in the Mobile and Electronics Manufacturing Framework finalized by the Engineering Development Board and is expected to be submitted to Shehbaz Sharif for approval. If implemented, the move would represent a notable change in the current taxation regime, under which no federal excise duty is applied to the import of completely built up units of mobile phones.
According to details of the proposed framework, the authorities plan to levy the 20 percent federal excise duty specifically on completely built up units, signaling a policy push to discourage reliance on fully assembled imported handsets and promote local value addition. In addition to mobile phones, the plan proposes a 10 percent customs duty on fully built units of laptops, desktops and tablets. Duties on completely knocked down units are expected to begin at 5 percent and gradually increase to 10 percent over time, creating a tiered structure designed to incentivize assembly and manufacturing within Pakistan. Policymakers view this calibrated approach as a way to gradually shift the market toward localized production without abruptly disrupting supply chains.
The framework also outlines the creation of a Rs 56 billion technology investment fund intended to support domestic manufacturing of mobile phones and other electronic devices. The fund would aim to facilitate capital investment, technological upgrades and ecosystem development for local producers. A central feature of the strategy is the re-export of refurbished mobile phones and laptops. Authorities estimate that between 30 million and 40 million devices could be processed annually under the scheme, potentially generating export revenues ranging from 300 million to 400 million dollars. This refurbished export model is being positioned as a way to tap into global demand for affordable devices while leveraging Pakistan’s manufacturing and processing capacity.
To operationalize the refurbished export plan, the government intends to establish dedicated refurbishment facilities within export processing zones under strict customs oversight. Proposed safeguards include mandatory IMEI registration, time bound re export requirements and close regulatory supervision to prevent leakage into the domestic market. Two operational models are under consideration. One would allow temporary import of devices without foreign exchange payments, backed by bank guarantees to ensure compliance. The second model would permit standard commercial imports followed by refurbishment and re export under bonded warehouse schemes. Together, these measures form part of a wider attempt to align trade policy, taxation and industrial incentives to strengthen Pakistan’s electronics manufacturing base while building a new export stream in refurbished technology products.
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