ISLAMABAD: A new levy on mobile handsets is all set to stir things up come July 1st. It is called the Mobile Handset Levy, and the government is expecting to collect around Rs12 billion revenue from it. The levy is fashioned after a similar exercise run in different countries.

It involves matching the IMEI numbers of all legally imported handsets with those that are active on the networks of telecom operators on a daily basis. If an IMEI number is on the network but its record does not exist with the Federal Bureau of Revenue (FBR), an automatic SMS will be sent to that device asking the owner to deposit sales tax, customs duty as well as the handset levy with the tax authorities within 30 days. Failure to comply will result in the device being barred from all Pakistani networks.

The amount of the levy varies, depending on the cost of the device. All devices below Rs10,000 will be exempt. Those that cost between Rs10,000 and 40,000 will charged Rs1,000 as handset levy while those between Rs40,000 and 80,000 will be charged Rs3,000. Finally, the handsets whose cost is above Rs80,000 will be will be levied a payment of Rs5,000.

Sources in the finance ministry tell Dawn that an exercise is currently underway to enable data sharing between the Pakistan Telecommunications Authority (PTA) and the FBR. All legally imported mobile handsets have their IMEI numbers registered with the customs authorities at the time duties and sales taxes are paid, giving FBR a database of all such handsets. However, the IMEI number of all smuggled handsets doesn’t exists in the FBR database. The new program will compile a daily database of the IMEI numbers of all handsets that are connected to Pakistani networks. Those devices whose IMEI number has no record in the FBR database will automatically be flagged as a smuggled device, and the owner will be required to pay the duties and taxes in addition to the handset levy, to continue using their device.

Sources reveal to Dawn that several meetings to create this number-matching system have already been held, and the PTA is preparing to do a soft launch of the program on May 25, which hopes to iron out all glitches till June 30 after which the system will be launched. To process the payment, the government has built a system that will enable users to pay online or through an ATM machine, the sources add.

Most people do not know whether the device they are using is legally imported, with all duties and sales tax paid, or it is smuggled with tax and duty evaded. According to government figures, around 10 million handsets are imported into the country legally every year and 8.2m have already been imported so far till March 2018. There is no data available on the size of smuggled handsets.

The finance minister says the levy is designed to discourage smuggling of handsets, as well as promoting registration of all IMEI numbers, that can help curb mobile phone theft. “Through this system,” he tells Dawn, “we can ensure that a stolen phone will never be able to connect to a Pakistani network again.” He also hopes it will encourage local assembly of handsets.

Published in Dawn, April 29th, 2018