PTA Confirms Tax on Old and New Phones is Still the Same

The Senate Standing Committee on Cabinet Division received clarification from the Pakistan Telecommunication Authority (PTA) regarding the mobile phone tax system in Pakistan. According to Dr. Khawar Siddique Khokhar, the PTA member responsible for enforcement, the registration system does not differentiate between new and used phones for tax purposes.

The Federal Board of Revenue (FBR), however, is the entity responsible for determining and collecting mobile phone taxes. The FBR uses the IMEI number to determine the tax associated with a specific mobile phone. The mobile phone registration process occurs when a device connects to a Pakistani network. The Federal Budget introduced a 20 percent annual reduction in customs duty on mobile phones, which is expected to continue until 2030.

Customs authorities calculate duties based on Article 25 of the Customs Act. Different valuation methods are applied for new and used phones, and customs authorities determine the applicable duties. When inspecting commercial consignments, customs authorities can differentiate between new and used phones, resulting in different tax applications based on customs valuation.

The PTA has been advocating for the rationalization of mobile phone taxes, and overseas Pakistanis are pleased that people are no longer asked to bring mobile phones from abroad. The committee chairman also noted that the GSMA warned that Pakistan's existing mobile phone taxes could impact the rollout and performance of 5G services.