Govt suspends tax exemption on phones brought by international travelers

For quite a while, the government had made it permissible for international travelers to have one phone registered with the Device Identification Registration and Blocking System (DIRBS) without paying any taxes i.e. free of cost. This rule is all set to be suspended now, in light of recent cases involving its misuse and also to generate additional revenue for the country.

Therefore, once the government notification has officially been an issue, international travelers will have to pay up even for their very first phone registration. Speaking at a press conference of the Federal Board of Revenue (FBR) on budget 2019-20, Member Inland Revenue and Policy Dr. Hamid Ateeq explained that the baggage facility was being misused by the masses to smuggle phones, therefore, suspending it was imperative.

In fact, DIRBS itself was introduced with the aim of curbing the smuggling of illegal mobile phones in the country. However, it has apparently failed to achieve the desired results, especially since various loopholes within the current system at airports are utilized to smuggle phones.

The misuse of passenger data is a clear violation of FBR baggage rule law where the user’s passport and CNIC are being used to register phones illegally under the baggage rule exemption. Pakistan Telecommunication Authority (PTA) itself has confirmed that passenger data was leaked and the details were used for the unlawful purpose of smuggling phones.

PTA has sent approximately 760 cases of data theft to the Federal Investigation Agency (FIA) and multiple arrests have been made as well. Interestingly enough, it has also been noticed that mobile phones are being registered in the name of children, which cannot happen without the involvement of internal resources.

As per PTA statistics, more than 663,622 individuals have registered their devices with DIRBS ever since February 2019, out of which 440,821 have been registered under the no-tax rule while 12,293 were registered under duty paid category.