Private news agency reported that Chairman Federal Board of Revenue (FBR), Shabbar Zaidi, has said that the recommendation for allowing duty-free import of mobile phones under baggage rule would be tabled before the federal cabinet.
Briefing the Senate Standing Committee on Information Technology and Telecommunication, Chairman FBR said that baggage rule was misused in the past, compelling the government to withdraw the facility and duty/taxes are now applicable on every mobile handset import.
The Ministry of Information Technology and Telecommunication (MoITT) confronted FBR on taxes on mobile phone imports, saying that it is affecting the IT sector’s growth negatively as well as the digital agenda of the government. The secretary MoITT pleaded before the committee that the duty on mobile import under the baggage rule should be withdrawn.
The senators from the government benches also opposed the government’s decision of imposing a duty on import of even a single mobile phone handset. The committee recommended to suspend an order of FBR and allow one duty-free mobile phone import under the baggage rules.
The Committee was of the view that wealthy people can afford any price of phones and taxes levied on them but the larger part of the population, who are using phones for multiple purposes, cannot afford it.
FBR gave a briefing on reasons for the withdrawal of customs duty exemption on the imported phone per calendar year under the personal baggage rules.
The member FBR informed the committee that the duty-free allowance on the import of mobile phones was withdrawn because the facility was being misused. Data of international arriving passengers was being stolen and the passport numbers and flight data were being used to enter data details in the Mobile Device Registration Software to claim exemption under the baggage rules.
He further said that expensive mobile devices were mostly being registered by using international passengers’ data. Furthermore, the government desired that there should be uniformity in the application of duty/taxes whether brought into Pakistan by passengers or locally procured and, therefore, the exemption was withdrawn to avoid this anomaly, he added.
Pakistan Telecommunication Authority (PTA) advised that more than 0.6 million units were imported under the baggage rule and most of them were high-end and expensive, and it was reported that the facility is being misused. He further said that taxes were reviewed and reduced for commercial and baggage imports.
He further said that more than 10 million mobile phone handsets were imported during 2018-19 and the government collected around Rs 28.8 billion in taxes. However during the first four months of the current fiscal year, around 7.6 million phones were imported and the government collected Rs 15.1 billion under the head of duties and taxes, indicating that imports increased.
Senators Faisal Javed and Shahzad Waseem said that mobile phones are not only for calls but also for businesses.
While concluding the agenda of withdrawal of customs duty exemption on one imported phones, it was observed that the withdrawal is affecting the middle and lower class and it was voted by majority to allow the import of one mobile in personal baggage and recommended the same to the FBR to reconsider the decision.
The meeting was attended among others by Senators Kalsoom Parveen, Shehzad Waseem, Faisal Javed Khan, Maulana Abdul Ghafoor Haideri, Abdur Rehman Malik, Sana Jamali, Fida Muhammad, Hasil Bizenjo, Chairman FBR, Secretary IT&T, SSP Rawalpindi, Director Cyber Crimes FIA and other officials.