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FBR seeking cabinet approval for taxing smuggled mobiles

FBR seeking cabinet approval for taxing smuggled mobiles

ISLAMABAD: The Federal Board of Revenue (FBR) has decided to seek approval from the cabinet to impose tax on smuggled mobile phones.

The tax machinery estimates that import of illegal phones in the market causes heavy revenue losses to the federal exchequer annually.

“We will submit the summary in the next cabinet meeting,” the official said requesting anonymity.

As per the proposed plan, the tax authority has worked out a plan to tax all those smuggled phones which are currently inactive and still in shops as unsold stock.

A cut-off date within the range of one to one and half months will be announced for owners of such phones for availing the scheme to legalise it, the official said.

Past the deadline, the official said, all those phones will become redundant on which duties are not paid at the nearest customs point.

Such phone sets, either smuggled before the deadline, or after that, will not be activated.

However, phone sets currently in use whether legally imported or smuggled will be exempted from the payment of duty.

The payment of duty on smuggled phone will depend upon the category they belonged to.

In 2017-18, Pakistan’s legal imports value of mobile phones reached $847.656 million in 2017-18.

Earlier, the imports had crossed the $1bn mark when there was no duty under the free trade agreement with China, or a very negligible duty applicable from other countries. The government has recently revised the duty structure and imposed regulatory duty on imports of mobile phones.

Consequently, the legal imports have started declining, mainly because of a rise in smuggling of mobile phones.