A proposal to reduce the PTA Mobile Tax on imported smartphones is unlikely to be approved in Pakistan’s upcoming FY27 federal budget. The proposal aimed to lower the current tax rate from 25 percent to 18 percent.
At present, overseas Pakistanis and travelers can temporarily use imported phones in Pakistan. After a limited period, users must pay PTA taxes to keep their devices active. High-end smartphones worth more than $500 currently face taxes close to 25 percent.
The proposed change was designed to provide relief to consumers. It was especially expected to benefit overseas Pakistanis who bring mobile phones from abroad. Many users have complained about the high PTA Mobile Tax on premium devices.
However, officials are reportedly hesitant to approve the proposal this year. Policymakers believe the reduction could hurt Pakistan’s local mobile phone assembly industry.
Local companies such as Airlink and Lucky Motor Corporation currently benefit from the existing tax structure. The current system discourages the import of fully assembled smartphones. This helps local assemblers compete in the market.
According to reports, reducing the PTA Mobile Tax may increase the demand for imported devices. As a result, locally assembled smartphone sales could face pressure.
In addition to mobile taxation, the government is also reviewing tax differences in the IT sector. Salaried employees in export-focused IT companies currently pay taxes between 5 and 20 percent. In comparison, freelancers and remote workers pay much lower effective tax rates.
Authorities are considering different options to balance the taxation system. One proposal suggests reducing taxes on salaried IT workers. Another proposal recommends increasing taxes on freelancers.
Despite these discussions, the government is cautious about affecting the country’s growing freelance and IT export sector. Pakistan’s freelance industry has expanded rapidly in recent years and plays an important role in foreign exchange earnings.
Topline Securities stated that both proposals may face resistance during the upcoming budget announcement. This includes the proposed PTA Mobile Tax reduction and changes related to IT sector taxation.
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The federal budget is expected to provide more clarity on these proposals next week.
