Expatriates paid Rs5bn tax in 7MFY21 for mobile phones

Published February 25, 2021
The duty was collected from expatriates and travellers on import of mobile phones under baggage. — AFP/File
The duty was collected from expatriates and travellers on import of mobile phones under baggage. — AFP/File

ISLAMABAD: The Federal Board of Revenue (FBR) collected Rs4.99 billion in the first seven months of this fiscal year on import of mobile devices through Device Identification, Registration and Blocking System (DIRBs), which is 34.47 per cent higher over the preceding year.

The duty was collected from expatriates and travellers on import of mobile phones under baggage. Since July 1, 2019, the government has withdrawn the facility of duty-free mobile handset under the baggage rules from abroad.

Official data available with Dawn showed that the increase in revenue from mobile phone import is due to the fact that now any non-duty paid/smuggled phone cannot be used in Pakistan without payment of due taxes and registration with the Pakistan Telecommunication Authority (PTA).

Pakistan Customs in collaboration with the PTA introduced the DIRBs to eliminate the use of smuggled devices in the country. It is believed that the successful intervention has attracted huge investment in the country in the local manufacturing of mobile sets.

The import of mobile phones sets brought by travellers dropped to 0.727 million between July to Jan 2021 as against 1.033m mobile sets imported during the same period last year. It is believed that high imported value and local manufacturing of mobile sets led to drops in mobile phone imports in personal baggage.

According to the FBR, there are around 17 companies in Pakistan which are now manufacturing mobile phones.

At the same time, there is a clear policy for mobile phones import commercially. Under commercial imports, as many as 27.167m handsets were imported during the seven months this year as against 12.642 m handsets over the last year, showing an increase of 115 pc.

The mobile sets also include completely knocked down (CKD) units which are locally assembled now.

The Customs Duty collection from commercial imports fell to Rs24.942bn during the period under review as against Rs26.389bn over the corresponding months of last year, showing a drop of 5.48pc.

According to the Customs official, the drop in revenue is mainly due to import of CKD mobile sets which attracts lower duty and taxes.

The import value of mobile phone handsets surged by 49.32pc to $1.135bn during the first seven months this year as against $0.760m over the last year. However, import of other apparatus fell by 7.96pc year-on-year to $0.246m during the period under review.

Due to the geographic proximity to China, which is a global hub for handsets manufacturing and is currently looking for investing outside the country due to increasing labour costs as well as trade tensions with the United States, presents a huge opportunity for the country.

Better use of information technology and enforcement through targeted operations against smugglers, the issue of availability of smuggled items has been addressed to a large extent which has provided space for local industry, he added.

Published in Dawn, February 25th, 2021

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