Federal Board of Revenue (FBR) has decided to review its decision of imposing Rs. 1000 tax on smartphones which itenforced in the first week of April 2013.
According to latest reports, a meeting between FBR officials and representatives of mobile phone industry on Wednesday resulted in a little success as the revenue authority assured them of reviewing the recently imposed tax rate on mobile phones in Pakistan.
According to SRO 280, dated April 4, all smartphones that land in Pakistan are subject to Rs. 1000 additional tax whereas Rs. 500 was imposed on all other mobile phones which do not come under the umbrella of smartphones.
The measure badly hit the mobile phone import in Pakistan which rely mostly on lower end or ultra-low cost mobile phones as a major contributor to the total monthly import. Not only the import figure came down but smuggling of mobile phones surged during the reported period.
Mobile phone sellers have been staging protest all over the country over this harsh tax structure.
FBR officials have hinted that the authority will consider reducing Rs. 1000 tax to Rs. 700 on smartphones and Rs. 500 would be brought down to Rs. 350 – 400 in the upcoming budget.
The revenue authority is already facing severe challenges owing to bulk reshuffling of FBR officials on the basis of personal liking and disliking.
It if feared that a targeted revenue of Rs. 2.05 trillion for the year 2012-13 will not be achieved due to internal rifts and uncertain situation. In first 15 days of May, the authority fell short of revenue as it collected Rs. 42.3 billion in taxes, a 19.4% less recovery over the same period in May last year.
Tax on mobile phone industry was a measure to make the situation a little favorable and now, only the upcoming budget will confirm that how newly elected government of PML-N will tackle the issue.
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