ISLAMABAD – Federal government mulls permission for import of two newmobile phones over international travel.
The Senate Standing Committee on Information Technology andTelecommunication on Monday recommended for suspending an order of FederalBoard of Revenue (FBR) and allowing two duty-free mobile phones’ import peryear under the baggage rules. The Ministry of Information Technology andTelecommunication (MoITT) confronted FBR on taxes on mobile phone import,saying it is affecting IT sector growth negatively as well as the digitalagenda of the government.
The secretary MoITT pleaded before the committee that chairman FBR may becalled on the next meeting to discuss the matter. The senators from thegovernment benches also opposed the government’s decision of imposing dutyon import of even a single mobile phone handset.
The committee met with Rubina Khalid in the chair here on Monday where FBRgave briefing on reasons for withdrawal of customs duty exemption on theimported phone per calendar year under the personal baggage rules. A seniorofficial of Pakistan Air Force (PAF) also expressed reservations over theimposition of duties on mobile phone imports, saying that officials withphones for defense purposes have been asked for registration which theycannot, and they faced great difficulties.
The member FBR informed the committee that the duty free allowance onimport of mobile phone brought by international passengers was withdrawnvide amending SRO 689 (I) 2019 dated 29-6-2019. The said SRO was madeeffective from 1-7-2019. The reasons for withdrawal of duty free allowancewere that the facility was being misused. Data of international arrivingpassengers was being stolen and the passport numbers and flight data werebeing used to enter data details in the Mobile Device Registration Softwareto claim exemption under the baggage rules.
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He further said that expensive mobile devices were mostly being registeredby using international passengers’ data. Furthermore, the governmentdesired that there should be uniformity in application of duty/taxeswhether brought into Pakistan by passengers or locally procured and,therefore, the exemption was withdrawn to avoid this anomaly, he added. TheFBR official said that around Rs 7-8 billion have been collected duringthis period from taxes on mobile imports.
However, the committee expressed serious annoyance over FBR’s responsewhile saying that instead of blocking loopholes in the system and improvingcheck and balance, the Board took away the facility which has annoyedinternational passengers, especially overseas Pakistanis. The secretaryMoITT said if a sector can contribute to the national economy in servicesand exports, it is none other but IT sector. He said if mobilemanufacturing plants are not available, it is not feasible to import mobilephones with such taxes and duties. He said that the matter has been takenwith chairman FBR. He further said that provincial governments, especiallyPunjab and Sindh, have imposed heavy taxes of 19 percent on services whichare also affecting the entrepreneurs as well as overall IT sector.
