Federal government mulls permission for import of two new mobile phones over international travel

Federal government mulls permission for import of two new mobile phones over international travel

ISLAMABAD - Federal government mulls permission for import of two new mobile phones over international travel.

The Senate Standing Committee on Information Technology and Telecommunication on Monday recommended for suspending an order of Federal Board of Revenue (FBR) and allowing two duty-free mobile phones' import per year under the baggage rules. The Ministry of Information Technology and Telecommunication (MoITT) confronted FBR on taxes on mobile phone import, saying it is affecting IT sector growth negatively as well as the digital agenda of the government.

The secretary MoITT pleaded before the committee that chairman FBR may be called on the next meeting to discuss the matter. The senators from the government benches also opposed the government's decision of imposing duty on import of even a single mobile phone handset.

The committee met with Rubina Khalid in the chair here on Monday where FBR gave briefing on reasons for withdrawal of customs duty exemption on the imported phone per calendar year under the personal baggage rules. A senior official of Pakistan Air Force (PAF) also expressed reservations over the imposition of duties on mobile phone imports, saying that officials with phones for defense purposes have been asked for registration which they cannot, and they faced great difficulties.

The member FBR informed the committee that the duty free allowance on import of mobile phone brought by international passengers was withdrawn vide amending SRO 689 (I) 2019 dated 29-6-2019. The said SRO was made effective from 1-7-2019. The reasons for withdrawal of duty free allowance were that 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 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of duty/taxes whether brought into Pakistan by passengers or locally procured and, therefore, the exemption was withdrawn to avoid this anomaly, he added. The FBR official said that around Rs 7-8 billion have been collected during this period from taxes on mobile imports.

However, the committee expressed serious annoyance over FBR's response while saying that instead of blocking loopholes in the system and improving check and balance, the Board took away the facility which has annoyed international passengers, especially overseas Pakistanis. The secretary MoITT said if a sector can contribute to the national economy in services and exports, it is none other but IT sector. He said if mobile manufacturing plants are not available, it is not feasible to import mobile phones with such taxes and duties. He said that the matter has been taken with chairman FBR. He further said that provincial governments, especially Punjab and Sindh, have imposed heavy taxes of 19 percent on services which are also affecting the entrepreneurs as well as overall IT sector.