Budget 2024-25: Govt proposes tax hike on imported phones, prices to jump

Budget 2024-25 includes plans to increase FED, regulatory duty, and PTA tax on luxury mobile imports
An undated image of Samsung and Apple mobile phones displayed on a table. — Pixabay
An undated image of Samsung and Apple mobile phones displayed on a table. — Pixabay

Finance Minister Senator Muhammad Aurangzeb on Wednesday presented the federal budget for the fiscal year 2024-25, outlining significant changes in tax policies during his maiden budget speech in the National Assembly.

One of the key proposals is the introduction of an 18% sales tax on various categories of mobile phones, aiming to bolster government revenue. Alongside this, exemptions on certain items are slated for withdrawal based on their categories.

Imported mobile phones are expected to bear the brunt of these changes, with taxes set to rise. The budget includes plans to increase federal excise duty (FED), regulatory duty, and Pakistan Telecommunication Authority (PTA) tax on luxury mobile imports, intending to promote local smartphone manufacturing by reducing the competitiveness of imported devices.

Read more: Budget 2024-25 — How will increase in PDL affect Pakistanis?

Conversely, the budget aims to incentivise domestic production of smartphones. Anticipated measures include tax reductions on the manufacturing of mobile parts, batteries, chargers, and headphones. These incentives seek to foster local manufacturing and stimulate growth within the domestic mobile phone industry.

The proposed tax overhaul in the mobile phone sector reflects the government's broader strategy to enhance revenue streams while encouraging local industry development. As the budget undergoes review and debate, its implications for consumers and the mobile phone market remain under scrutiny.