KARACHI – High-end mobile phone prices are set to fly high as Federal Board of Revenue (FBR) revised Sales Tax Act, 1990 and the Federal Excise Act.
Under new changes, there will be a 25 percent Sales Tax on import of mobile phones in Completely Built Up (CBU) condition valued at over 500 dollars per device.
Sales Tax on Mobile Phones
| Tax Update | Details |
| Import Tax on Mobiles | – 25% sales tax on CBU mobile phones valued over $500 |
| – 18% sales tax on CBU mobile phones valued at or below $500 | |
| Local Manufacturing Tax | – 18% sales tax on locally manufactured CBU mobile phones |
| CKD/SKD Import Tax | – 18% sales tax on mobile phones imported in CKD/SKD condition, regardless of value |
It has been learnt that 25 percent sales tax will be levied on import of mobile or satellite phones if the import value exceeds $500 or its equivalent in rupees for locally supplied phones. This tax applies at the time of import or registration.
For imported CBU phones valued at or below USD 500, an 18 percent sales tax will apply.
Additionally, an 18 percent sales tax will be charged on locally manufactured mobile phones in CBU condition and on imports in CKD/SKD condition, regardless of their value.
Tax Fraud
The updated Sales Tax Act introduces a new definition of “tax fraud,” which includes underreporting or underpaying taxes, overstating tax credits or refunds, and submitting false documents or withholding information to evade taxes.
To address tax fraud, the FBR has established a Tax Fraud Investigation Wing with various specialized units. The FBR may require businesses to integrate their electronic invoicing systems for real-time sales reporting. Penalties for tax fraud include a fine of Rs25,000 or 100% of the evaded tax, whichever is higher, and potential imprisonment of up to five years for evading less than one billion rupees, or up to ten years for evading one billion rupees or more, along with additional fines.
