Budget 2018-19: Mobiles to get more expensive as govt proposes new taxes on imports

The Pakistani government is planning on imposing new taxes on already heavily taxed sector of the country — mobile phone industry.

Pakistan’s Federal Government has proposed an additional tax on the import of smartphones according to Excise Act 2005 in the lower house of the Parliament. The budget 2018-19 is the sixth and final budget presented by PML-N as the next general elections of Pakistan are set to be organized this year.

According to the newly introduced budget, the maximum levy on importing mobile phones in Pakistan is up to PKR 5,000 on the smartphones which are priced over PKR 80,000. In addition, a PKR 3000 import tax has been imposed on smartphone ranging between PKR 40,000 to PKR 80,000.

However, the federal government has also relieved some low-end phone users as there’s no additional import duty on the smartphones below the value of PKR 10,000. Meanwhile, a PKR 1000 import levy has been imposed on smartphone ranging from PKR 10,000 to PKR 40,000.

If we compare these newly proposed taxes with the last year budget, we can clearly see that the federal government had reduced taxes on certain kind of smartphones, but surprisingly this year we are seeing an immense increase on duty of smartphones.

As per the reports of March 2018, the mobile phone imports in Pakistan crossed $500 million in just 8 months (July-February) of the Fiscal Year 2017-18. However, it is likely that due to the newly imposed tax on the government Pakistan may see a slight decrease in mobile phone imports, despite the need that there must be more manufacturing plants in the country.