On 4th April 2013 Federal Board of Revenue Pakistan issued a new tax notification as per its amendment in law to apply tax on mobile phones. The tax on a mobile phone ranging from RS 500 to RS 1000 and the tax ratio was raised up to 16%. Due to this move of FBR the sales of mobiles was cut up to 50%. But after the big brands of mobile in PAKISTAN applied stress on FBR, it suddenly changed its color like a chameleon and lowered the tax ratio from 16% to 2%. Previously the tax on 50,000 rupees mobile was 8,000 rupees but now it is only 750 rupees.
As FBR has to compensate the reduced tax ratio somewhere so now it targets telecommunication companies and made compulsory for them to pay RS.250 on the activation of each new sim.
So according to tax notification SRO460 issued on 30 may the tax on a RS.500 to RS.1000 set is reduced to RS.50 only. The mobile set with 2.1 megapixels to 10 megapixels with less than 2GHZ, between 2.1 to 4.1 inches in size are applicable of tax of RS.500.
The medium prized mobiles usually ranging from 5 to 10 thousand rupees having 2.6 inches or less screen size and camera of 2 or less megapixels will charged RS.250 tax.
All android mobiles of 2.6 or higher, windows 8 mobiles and IOS mobiles will qualify for the tax of RS. 500.
And all the other mobiles of 10 or more megapixels camera and having 2 GHz or more processor will automatically qualify for RS.500 tax.
According to the FBR previously all the mobiles run on SCOM technology. There was a lot of tax collection from mobile section but now as per new GSM technology mostly mobiles are locally made and are forbidden of tax due to certain technical and technology issues. There was not much revenue generated but now due to new tax law Federal Board of Revenue Pakistan will add more to the revenue of government.
But now as he telecommunication companies are under knife they are protesting against new law because it will make their Sims expensive and will not attract more customers. Already in the name of security mobile communication is blocked in different areas of Pakistan randomly and causes telecommunication companies loss of millions. The new law will also repel new investors as well as present ones to invest in Pakistan.