Here’s Why Mobile Phone Prices Have Not Decreased Much Despite Reduction in Duty

The prices of imported mobile phones have not dropped by much despite the abolition of the regulatory duty (RD), as only 50 percent RD was reduced under the Federal Board of Revenue (FBR) notification. Sources told ProPakistani there was a misconception about the withdrawal of the RD after the expiry of the time-bound notifications from March 31, 2023. There was confusion that 100 percent RD has been abolished on luxury items including mobile phones from March 31, 2023. The factual position is that only 50 percent RD has been reduced on the import of mobile phones. The withdrawal of the FBR’s SROs from March 31 has only abolished the component of the increased rates of RDs, but the original SROs of the RDs are still intact. For example, RD has been reduced from Rs. 44,000 to Rs. 22,000 on the import of high-end iPhones. The amount has been compensated by charging a higher rate of 18 percent sales tax. The FBR has also imposed a 25 percent sales tax on the import of luxury items. Besides, the buyer has to pay withholding tax as well as a fixed mobile levy on the import of mobile phones. The standard rate of sales tax has also been increased from 17 to 18 percent which is applicable on the import of mobile phones. Therefore, the impact of a reduction in RD is not visible on the import of mobile phones in the presence of increased rates of sales tax, withholding tax, and fixed mobile levy, sources added.