Over 186.9 million people in Pakistan now use mobile phones.
The expensive tax structure has negatively impacted the average public’s access to and affordability of smartphones, thus this news is a welcome relief.
The Pakistan Telecommunication Authority (PTA) has lowered the tax imposed on smartphones, which is a big update and provide relief to several consumers who have been plagued by the excessive tax rates the government has previously enacted.
Taxes On Imported Mobile Phones
In the recent budget for 2023–24, the tax structure for imported mobile phones has changed.
Prior to April 1, 2023, the regulatory tariff on imported mobile devices was reduced by 50%. The recent withdrawal of the FBR’s Statutory Regulatory Orders (SROs) only affected the higher rates of regulatory duties; the initial notification for these duties is still in effect.
The amount of money being deposited into the national exchequer was reduced from Rs85 billion to only Rs5 billion to Rs10 billion as a result of the government being forced to increase the tax on mobile phones by 100% to 150% in the past.
In order to address the budgetary crisis of the current fiscal year, a proposition for a significant reduction in cell phone levies—which are now between 100% and 150% on small and large mobile phones—is being discussed in the new budget.
Taxes on iPhone
For various series models, taxes had been lowered by up to 20%. It has been decreased to between Rs. 9,074 and Rs. 31,562 for those who register their gadgets through a passport, and between Rs. 29,832 and Rs. 34,901 for those who register through a CNIC.
The tax on the iPhone 14 has been cut by Rs 9,074 to Rs 125,751 on Passport, while the tax on the iPhone 14 Plus has been down by Rs 14,824 to Rs 125,751.
The PTA reduced the tax on the iPhone 14 Pro and iPhone 14 Pro Max from Rs127,000 to Rs127,068 (a reduction of Rs22,775 and Rs31,562, respectively).
The CNIC authority has approved a tax decrease on the iPhone 14 and iPhone 14 Plus of Rs29,832 and Rs36,157, respectively, to Rs131,126 for both models.
The tax for the iPhone 14 Pro has been decreased by Rs31,602 to Rs145,801, while the tax for the iPhone 14 Pro Max has been down by Rs34,901 to Rs152,242.
Governmental Concerns and Consumer Behavior
Government officials are concerned by the sudden change in consumer behavior, where people are suddenly refusing to abide by the PTA tax laws because the tax rates are so much higher.
Discussions are in progress to address the problem and possibly lessen the tax load in the future budget as it is understood that high taxes have an influence on the accessibility and cost of cellphones.
The Effect on Accessibility and Affordability
The general public’s access to and affordability of cellphones has been directly impacted by the hefty taxes placed on them. Prices have risen as a result of the higher tax rates, making smartphones less affordable for a sizeable portion of the population.
This financial burden on customers is intended to be lessened by the anticipated fall in tax rates, making smartphones more accessible and inexpensive.
Lower Smartphone Taxes’ Advantages
In addition to helping individual customers, lowering smartphone taxes will advance the digital economy as a whole. Increased use of smartphones has the potential to spur innovation, boost e-commerce, and improve connectivity all throughout the nation.
Furthermore, it is anticipated that lower tax rates will deter users from buying smartphones on the black market and instead encourage them to do so legally.
The government’s readiness to reevaluate the tax system shows how dedicated it is to promoting a welcoming business environment and promoting technological improvements.
The projected reduction in PTA taxes on cell phones is consistent with the government’s goal of creating a digitally connected Pakistan and underlines its commitment to promoting a liberal and diverse society.