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HomeTechFBR Adjusts Phone Taxes: Differential Treatment for Overseas Visitors vs. Commercial Importers

FBR Adjusts Phone Taxes: Differential Treatment for Overseas Visitors vs. Commercial Importers

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In a recent move by the Federal Board of Revenue (FBR), a new valuation ruling, number 1834 of 2023 from the Directorate of Valuation Karachi, has introduced varied tax treatments for mobile phone importers and incoming international passengers.

Under this ruling, commercial importers of new mobile phones won’t benefit from any concessions, facing duties and taxes based on comparatively higher customs values. The new ruling has expanded the list of models for assessing taxes on these commercial imports.

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However, there’s a distinct relief for incoming international passengers, particularly overseas Pakistanis, who will now enjoy a depreciation allowance of up to 60% on used or refurbished mobile phones. This depreciation concession is a part of the valuation ruling, allowing assessment based on decreased values for these devices.

For used or refurbished mobile phones brought in by legitimate passengers, customs values are now determined considering their depreciation, included in the prescribed tabulated values.

In cases where brands or models imported in commercial quantities aren’t listed in the provided annexure, clearance Collectorates are advised to evaluate them under Section 81 of the Customs Act, 1969. Subsequently, they will refer these cases to the Directorate for the final determination of their values.

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Sources indicate that overseas Pakistanis, benefitting from increased depreciation rates, stand to gain significantly under this ruling. The raised depreciation, up to 60% for phones up to five years old carried by incoming international passengers, offers relief specifically to this group. In contrast, commercial importers won’t experience any concessions according to the new ruling.

The valuation for new models of mobile phones imported will now be at higher values compared to older ones. This policy shift aims to reduce the margin of under-invoicing for both existing and new models of branded mobile phones.

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