Big Relief Coming? Mobile Phone Taxes in Pakistan Likely to Be Reduced in Upcoming Budget

If you have been holding off on buying a new smartphone because of sky-high taxes, there is finally some good news on the horizon. The National Assembly Standing Committee on Finance has officially recommended a reduction in mobile phone taxes, and the government has agreed to review the matter during the upcoming fiscal year budget for 2026-27.

For years, Pakistanis have paid some of the highest taxes in the world on mobile phones. But that may finally be changing. Let me break down exactly what is happening, how much you currently pay, and what you can expect in the coming months.

The Current Situation: Why Mobile Phones Are So Expensive in Pakistan

Here is a shocking fact. If you buy an imported mobile phone worth $500 (approximately Rs140,000), you currently pay around Rs76,000 in taxes. That is more than half the price of the phone itself.

Phone Type	Tax Rate	Example Tax Amount
Imported phone ($500 value)	54%	Approximately Rs76,000
Imported phone ($700-750 value)	55%	Approximately Rs90,000 or more
Locally manufactured phone	25%	Significantly lower

Tax Breakdown by Component

General Sales Tax (GST): 18%

Withholding Tax (high-end devices): Approximately Rs11,500

Customs Duty and Other Levies: Remaining percentage

The Big Disparity: Imported vs Local Phones

One of the most striking things the committee learned is how differently imported and locally assembled phones are treated.

Type	Tax Rate	Examples
Locally Manufactured or Assembled	Approximately 25%	Tecno, Infinix, Xiaomi (local assembly), Vivo, Oppo
Imported	54% to 55%	iPhone series, Samsung flagships (S series, Fold and Flip), Google Pixel

According to officials, except for Apple, all major smartphone brands are now manufactured locally in Pakistan. This means iPhones and certain high-end Samsung devices face the heaviest tax burden because they are still imported rather than assembled locally.

Recent Tax Reductions Already Happened (For Used Phones)

While the current discussion focuses on new phones, the government has already taken some steps to reduce taxes on used and refurbished phones. In January 2026, the Directorate General of Customs Valuation introduced new customs values for 62 used mobile phone models.

Model	Previous Tax (PKR)	New Tax (PKR)	Savings (PKR)
iPhone 15	60,000	42,000	18,000
iPhone 14	50,000	40,000	10,000
iPhone 13	50,000	35,000	15,000
iPhone 12	40,000	22,500	17,500
iPhone 11	21,000	15,000	6,000

What the National Assembly Committee Said

Syed Naveed Qamar (Committee Chairman): "When sales tax is already being applied, there is no justification for additional income tax on mobile phones." Called for a clear and transparent mobile phone taxation policy.
Ali Qasim Gilani (PPP MNA): Noted that FBR's assessed market values were far higher than actual market prices, leading to inflated tax demands.
Sharmila Farooqi (Committee Member): "Take taxes, but not to the point where taxpayers can't breathe." Shared her personal experience of a 60% tax burden on a phone worth Rs370,000.

What FBR Officials Told the Committee

Point	Details
Tax Collection	FBR collected Rs82 billion in taxes from mobile phone imports during 2024-25
High-End Phones Contribution	Rs18 billion came from high-end models (23-24% of total collection)
IMF Constraints	Current tax structure is tied to IMF program commitments
GST Reduction	No scope to reduce 18% GST at this time
Overvaluation Issue	Acknowledged that some valuations need revision

What Happens Next? The Budget 2026-27 Timeline

Milestone	Expected Timing
Review and analysis by FBR and Tax Policy Office	April to May 2026
Presentation of options to the committee	Before budget announcement
Federal Budget 2026-27 presentation	May or June 2026
New tax rates take effect	July 1, 2026 (start of fiscal year)

What You Can Do Right Now

If You Need a Phone Immediately

Consider locally assembled brands (25% tax instead of 54%)
Buy a used or refurbished phone (taxes reduced in January 2026)
Check PTA registration timeline (60-90 days to register)

If You Can Wait

Wait for the budget announcement (May/June 2026)
Follow official FBR and PTA sources only
Monitor FBR valuation rulings for customs value drops

Frequently Asked Questions

What is the current tax rate on imported mobile phones in Pakistan?

Imported mobile phones face a total tax burden of approximately 54 to 55 per cent of their value. For a phone worth $500, this translates to around Rs76,000 in taxes.

Are locally manufactured phones taxed the same as imported ones?

No. Locally manufactured or assembled phones are taxed at a much lower rate of about 25 per cent.

Will mobile phone taxes be reduced?

The National Assembly Standing Committee on Finance has recommended a reduction, and tax officials have assured the committee that the matter will be reviewed during the budget 2026-27 process.

When will the new tax rates take effect?

If approved, new rates would likely take effect on July 1, 2026, which is the start of the new fiscal year. The federal budget is expected to be presented in May or June 2026.

Why is there an 18% GST on phones that cannot be reduced?

FBR officials told the committee that due to Pakistan's commitments under the IMF program, there is currently no scope to reduce the 18 per cent general sales tax.

What is the PTA tax everyone talks about?

The PTA does not impose or collect taxes. The confusion comes from the DIRBS registration system managed by PTA. The actual taxes are collected by the FBR. PTA only enforces the registration requirement.

The Bottom Line

The National Assembly Standing Committee on Finance has recommended a reduction in mobile phone taxes, and the government has agreed to review the matter during the budget 2026-27 process.

Currently, imported phones face a staggering 54 to 55 per cent tax burden, while locally assembled phones are taxed at around 25 per cent. A phone worth $500 attracts approximately Rs76,000 in taxes.

Committee members have strongly criticized the current structure, calling it excessive and unfair. FBR officials have acknowledged the concerns but cited IMF commitments as constraints on reducing GST and withholding tax. However, other components of the tax structure could be adjusted.

For consumers, this means there is real hope that phones could become more affordable by mid-2026. The government recognizes that smartphones are essential tools for education, work, and banking, not luxury items. Stay tuned. The budget is coming, and relief may be on the way.

This article was last updated on April 16, 2026, based on official briefings from the National Assembly Standing Committee on Finance, FBR officials, and the Tax Policy Office. Tax policies are subject to change, and readers are advised to verify current rates through official channels before making purchasing decisions.