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The federal government has confirmed significant tax relief for imported mobile phones priced between $101 and $200, with the advance income tax reduced by nearly 89% and the mobile handset levy cut by more than 66%, according to a written reply submitted by the Finance Minister to the Senate.
The disclosed figures show that advance income tax for this handset price category has fallen from Rs. 930 to Rs. 100, a reduction of Rs. 830 per phone. Meanwhile, the mobile handset levy has been reduced from Rs. 600 to Rs. 200, providing additional relief of Rs. 400.
Combined, these two charges have fallen from Rs. 1,530 to Rs. 300, a reduction of Rs. 1,230 per imported handset in the specified price band.
The figures were reiterated in the Senate; the reply should not be read as announcing an entirely new round of tax cuts.
How Much Tax Has Been Reduced on Imported Mobile Phones?
The reductions concern two specific levies on imported mobile phones valued between $101 and $200 and do not apply across all handset price categories.
| Tax category | Previous rate | Revised rate | Reduction |
|---|---|---|---|
| Advance income tax | Rs. 930 | Rs. 100 | Rs. 830 |
| Mobile handset levy | Rs. 600 | Rs. 200 | Rs. 400 |
| Combined | Rs. 1,530 | Rs. 300 | Rs. 1,230 |
The written reply did not provide an estimate of the revenue impact or indicate whether the lower charges have translated into equivalent reductions in retail smartphone prices.
Sales Tax on Mobile Phones Remains Unchanged
Despite the reduction in these two levies, the government has not reported corresponding changes to the existing sales tax structure.
Imported mobile phones valued at up to $500 remain subject to 18% sales tax, while phones valued above $500 are subject to a 25% rate, according to the tax details supplied in the Senate reply. Locally supplied mobile phones remain subject to a general sales tax rate of 18%.
The reply also refers to a Rs. 250 sales tax on mobile SIM activation under the Ninth Schedule of the Sales Tax Act, 1990. However, the cited SIM-related provision ceased to apply from July 1, 2020, so it should not be described as a currently applicable charge without further legal clarification.
For consumers, the key distinction is that cuts to advance income tax and the mobile handset levy do not eliminate other applicable taxes, duties or charges. The final price of an imported phone will also depend on import costs, exchange rates and retailer pricing.
The Senate disclosure highlights targeted relief for lower-priced imported phones, but its practical benefit to buyers will depend on whether reduced charges are reflected in market prices.
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Mobile Phones Tax Installment Plan Remains Unclear as PTA Distances Itself From Collection
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