The Government of Pakistan, through a presidential ordinance, has reduced the rate of withholding income tax and Sales tax on the import of mobile phones.

The Federal Board of Revenue (FBR) issued a list of salient features to explain the amendments to Income Tax Ordinance, 2001 through Tax Laws (Second Amendment) Ordinance, 2001. The amendments will apply to income tax, sales tax and customs duty.

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Prior to the promulgation of the Tax Laws (Second Amendment) Ordinance, 2019 the rate of withholding income tax on the import of mobile phones was Rs. 730 in case of a mobile phone valued between $30 and $100.

In order to complement the efforts of the government towards the promotion of financial inclusion and e-commerce, income tax at the import stage for affordable mobile phones has been reduced. Taxes have been reduced for phones having a value exceeding $30 and up to $100, from Rs. 730 to Rs. 100 per mobile phone.

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Sales tax on mobile phones up to the value of 30 US dollars has been reduced from Rs. 130 to Rs.100 and phones having a value of up to 100 US Dollars from Rs. 1320 to Rs. 200.

Fakhar Ahmed, Chief Comms Officer at Jazz, while appreciating the move said:

“The government’s move to reduce duty on basic Smartphones is a welcome decision. For a truly #DigitalPakistan, affordable and quick access to the Internet is critical. With this pro-technology move, we also predict improved social impact in healthcare, education and digital financial services, especially in underserved areas of Pakistan. We look forward to more substantive policies that make Pakistan digital in the long term.”