ISLAMABAD: A parliamentary panel on Thursday raised concerns over the heavy taxation on mobile phones and asked the Ministry of Finance’s Tax Policy Office (TPO) to present a comprehensive report on the current tax structure for both imported and locally produced devices.
The National Assembly Standing Committee on Finance, chaired by Naveed Qamar, noted that income tax imposed on mobile phones was effectively functioning like a sales tax and urged authorities to reassess the policy. The committee also sought a detailed explanation of the rationale, revenue impact and objectives behind the existing taxation regime.
During the briefing, Rashid Mahmood Langrial informed members about the current tax framework. Following the discussion, the committee recommended reducing taxes on mobile phones to make them more affordable, with officials assuring that the issue would be taken up in the upcoming budget.
Mr Qamar specifically called for a breakdown of taxes applied to phones under Completely Built Unit (CBU), Completely Knocked Down (CKD) and Semi Knocked Down (SKD) categories. The committee stressed that any revised policy should ensure fairness, improve affordability and encourage local manufacturing, while also reviewing exemptions under the Income Tax Ordinance, 2001, and Baggage Rules, 2006.
Officials revealed that imported phones priced above $500 face a tax burden of around Rs76,000 — roughly 54 per cent — while devices in the $700–$750 range are taxed at nearly 55pc. In comparison, locally assembled phones are taxed at about 25pc. The tax structure includes an 18pc general sales tax (GST), concessional income tax and a withholding tax of around Rs11,500 on high-end devices.
Despite acknowledging concerns, tax authorities maintained there was little room to reduce GST or withholding tax rates. However, Mr Qamar emphasised that access to modern technology was essential for economic growth and argued that additional income tax on phones was unjustified when sales tax was already in place.
The committee was also briefed on exemptions available for visually impaired individuals and for phones brought in under personal baggage rules, along with varying sales tax rates between 18pc and 25pc depending on device classification.
In addition, the panel approved — with amendments — several key bills, including the Special Economic Zones Amendment Act, 2026, the Parliamentary Budget Office Bill, 2025, and the Export-Import Bank of Pakistan Amendment Bill, 2026.
Senate panel raises concerns over SMS charges
Separately, the Senate Standing Committee on Finance, chaired by Saleem Mandviwalla, reviewed SMS alert charges in the banking sector during a briefing by the State Bank of Pakistan.
The committee expressed dissatisfaction over telecom companies’ failure to provide data. The Pakistan Telecommunication Authority informed members that banks rely on bulk SMS services through aggregators, increasing costs. Customers reportedly receive around 15 SMS alerts per month.
Mr Mandviwalla directed banks and telecom firms to submit detailed cost and revenue data, while instructing the PTA to propose a comprehensive solution in consultation with stakeholders.
The panel also discussed promoting PayPak, with officials highlighting ongoing efforts to expand digital payments through QR-based systems. Usage of PayPak has grown and is now being co-badged with global networks such as Visa. The committee welcomed the progress and stressed reducing reliance on international payment systems to limit foreign exchange outflows.
The issue of asset declarations by government employees also came under scrutiny, with Sherry Rehman criticising the lack of implementation as a “gross violation of law”. The committee directed authorities to resolve the matter and report back in the next session.
Finally, the committee reviewed the Corporate Social Responsibility Bill, 2026, and unanimously recommended its approval with amendments, including mandatory disclosure of CSR activities.