If you plan to buy a new mobile phone, it would be helpful to understand the revised modified taxes that the Federal Revenue Board disclosed on Monday because it could save you money.
Under the new service structure, the price of a mobile phone may have dropped or may have gone up. If you pay more or less on your next phone, it will depend on one of the 6 tax forms that FBR has entered.
For example, for a mobile phone of Rs25,000, it will now pay Rs2,700 in service. This duty is almost half of (Rs5,000) what he had to pay for the same phone in the previous tax structure.
Similarly, for all mobile phones valued at $ 30 or less, the tax has been reduced to Rs180 per series (previously it was Rs250).
But the price of some mobile phones may have gone up. For example, an Rs5,000 phone will now cost Rs1,800 additional in regulatory duties (compared to the previous Rs250).
Any increase or decrease in taxes under the new tax structure will change the price of mobile phones.
But there is more bad news.
In addition to the regulatory tariff (customs), it also pays other taxes, such as sales tax, advance sales tax, advance income tax and a mobile phone tax if the mobile phone is valued at more than Rs10 , 000 There are other taxes that you pay in addition to the customs tariff. All these taxes remain unchanged, but you can compare the customs duties in the new structure with those of the previous one to find the difference. Under the previous structure, a fixed Rs250 was charged by mobile phones with a value of up to $ 60. Those who value above that and up to $ 130 had a tax of 10%, while the highest slab (mobile phones with a value greater than $ 130) had a rate of 20%.
The old structure has been revised in six new blocks now. The following table shows the new rates and can help you know if a phone will cost you more or less compared to the previous customs tax rates.
The government says it has to take harsh measures, such as increasing tariffs on mobile phones, to stop smuggling, which costs the treasury millions of tax evasion. Last December, the government raised tariffs on mobile phone imports and imposed restrictions on the number of mobile phones people bring to Pakistan. Now, Pakistanis traveling to Pakistan can bring only five mobile phones in a fiscal year and those will only be tax exempt. They will have to pay for each extra mobile they bring with them.
A customs official recently told Samaa Digital that the old tax structure was very complex and that the government was working to simplify it. The goal is to stop smuggling, since up to 40% of our imports are contraband, he said.
“Once, we eliminated it and simplified the tax structure, the government will certainly consider reducing taxes, especially on low-end phones,” the official said.
The government faces a budget deficit of more than Rs2 trillion due to a very low tax base and rampant tax evasion. The increase of duties in high-end mobile phones is one of the measures in that direction. However, critics say that high taxes on mobile imports will hurt both merchants and consumers. The higher tasks will make the devices more expensive and out of reach of the marginal segments of society and deprive them of all the benefits that the Internet has to offer. They will affirm that it will reduce Internet penetration and the growth of the internet-based economy.