Sales tax on cellphones may go up by 100pc in budget

ISLAMABAD: The government is planning to double sales tax on cellphones – from Rs500 to Rs1,000 for mid-range phones, and from Rs1,000 to Rs2,000 for high-end smart-phones, in the upcoming budget 2016-17, it has been learnt on authority.

A proposal is under consideration to substantially raise sales tax on the import of cell-phones in the next fiscal year, according to sources.

Last year also, the government had doubled the sale tax on mobile phones’ import.

During the ongoing fiscal year, the Federal Board of Revenue (FBR) collected Rs8.06 billion sales tax on the import of mobile phones, compared with a projected collection of Rs8 billion for the said period.

In the last budget 2015-16, sales tax rates on cellphones were revised upward. Therefore, regulatory duty at the rate of Rs200 per set was withdrawn on mobile phones with effect from the date of application of the revised sales tax rates i.e. July 1, 2015.

In the last budget, the FBR increased rate of sales tax on mobile phones to Rs300, 500 and 1000, from Rs150, 250 and 500, respectively, depending on features in the mobile set.

The mobile phone companies and phone makers said it time and again that the revised taxes were hurting the growth of industry, which was not good for the country.