Consumers face over 55% tax on mobile phones

Mobile phone users pay over 55% of the price of a handset in taxes, which is exorbitant, reflects the narrow-mindedness of policymakers and requires urgent reduction in levies to promote digitisation, revealed proceedings of a parliamentary committee meeting. The National Assembly Standing Committee on Finance on Tuesday described heavy taxes on mobile handsets as irrational and narrow thinking that served the purpose of the Federal Board of Revenue (FBR) at the expense of the economy. The government was charging over 55% of the prices of mobile phones in taxes, disclosed Member Operations Customs of the FBR Shakil Shah. He explained that taxes were collected on the basis of six price bands, starting from the base price of $30 to over $500 per set. On a minimum value of $700, the FBR charges Rs16,000 mobile levy, Rs22,000 regulatory duty, Rs11,500 withholding tax and above all 25% of the value of the handset inclusive of taxes as sales tax. By imposing these four types of taxes on a single handset of over $700, the FBR collected Rs18 billion in the last fiscal year.