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FBR proposed to reduce import duty on smartphones

FBR proposed to reduce import duty on smartphones

ISLAMABAD: Federal Board of Revenue (FBR) has been urged to reduce customs duty on import of smartphones for the growth of economy.

In its proposals for budget 2020/2021 submitted to FBR, the Overseas Investors Chamber of Commerce and Industry (OICCI) said that after the implementation of DIRBS and accompanying tax increase, the smartphone penetration in the country has dropped by 6 percent in the current fiscal year.

“This is primarily due to the reason that for smartphone, we primarily rely on imports,” the OICCI said.

Smartphones are not only used for communications but are predominantly used as an enabling tool for internet in almost all segments of the economy including finance, education, health, agriculture, social development etc.

In the digital ecosystem, availability and affordability of these phones plays a major role in the growth of economy.

All imported mobile phones including smartphones are now heavily taxed, rendering them unaffordable for vast segment of the population.

This lack of affordability has become major impediment in proliferation of broadband in the country.

The OICCI recommended:

i. Retaining the current tax structure on low-end 2G handsets/feature phones (i.e. Rs. 500 as tax per device)

ii. Reducing taxes on 3G/4G handsets (smartphones) below Rs. 10,000 and cap it to a max of Rs. 1,000/- per device

iii. Reducing taxes on smartphones in the higher price brackets and cap it to a max of Rs. 5,000/- per device.