NA panel urges FBR to reassess mobile phone tax structure by March 2026

The National Assembly’s Standing Committee on Finance failed to convince the Federal Board of Revenue (FBR) to immediately reduce taxes on the import of 5G-enabled smartphones. The committee has instead instructed the tax authority to present several options for tax rationalisation by March 2026, with the proposal to be considered in the 2026-27 federal budget.

The meeting, chaired by Syed Naveed Qamar, saw lawmakers including Ali Qasim Gillani, Sharmilla Farouqui, and Hina Rabbani Khar criticising the high taxes on mobile phones, particularly pointing out that excessive duties have made even mid-range smartphones unaffordable. 

Qamar emphasised that smartphones have evolved from luxury items to essential tools, adding that the ongoing justification of being “in an IMF programme” could no longer be used to defend such heavy taxation.

Pakistan Telecommunication Authority (PTA) Chairman Maj-Gen (retd) Hafeez Ur Rehman opposed the reduction of taxes on imported phones, stating that 94% of mobile phones in Pakistan are locally assembled, with only 6% being imported, and only 2% of the locally produced phones are 5G-enabled.

FBR Chairman Rashid Mahmood Langrial expressed agreement with the committee’s concerns but suggested that the Ministry of Finance’s Tax Policy Office take charge of the tax rationalisation process. He highlighted that FBR had collected Rs82 billion in taxes from mobile phone imports during the fiscal year 2024-25, with Rs18 billion coming from high-end models, which made up 23-24% of the total collection.

PPP MNA Ali Qasim Gilani criticised the tax system, stating that consumers were forced to pay taxes again when their phones were lost or replaced. He also pointed out that FBR’s assessed market values were far higher than actual prices, leading to inflated tax demands. He noted that FBR had set the value of an iPhone 16 at USD 1,600, while the market price was much lower.

Langrial responded by assuring the committee that any overvaluations would be revised. He also acknowledged a recent drop in average smartphone prices and suggested that the FBR work with the Ministry of IT to adjust taxes in line with market trends. He further clarified that the Ninth Schedule of the Sales Tax Act specifically governs mobile phone taxation.

Committee member Sharmila Farooqi expressed frustration with the current tax regime, calling it excessive and unfair. She shared that she had purchased a phone worth Rs370,000, but the tax demand amounted to Rs190,000, making the overall tax burden 60% of the phone’s price. “Take taxes, but not to the point where taxpayers can’t breathe,” she remarked.

Representatives from the PTA clarified that it did not impose any direct taxes and that all duties were collected by FBR. They further added that except for Apple, all major smartphone brands are now manufactured locally.

The PTA also announced plans for Pakistan’s 5G spectrum auction in February 2026, with full 5G deployment expected by the end of the year.