Senate body for allowing to import two duty-free mobile phones' per year

The Senate Standing Committee on Information Technology and Telecommunication on Monday recommended for suspending an order of Federal Board of Revenue (FBR) and allowing two duty-free mobile phones' import per year under the baggage rules. The Ministry of Information Technology and Telecommunication (MoITT) confronted FBR on taxes on mobile phone import, saying it is affecting IT sector growth negatively as well as the digital agenda of the government.

The secretary MoITT pleaded before the committee that chairman FBR may be called on the next meeting to discuss the matter. The senators from the government benches also opposed the government's decision of imposing duty on import of even a single mobile phone handset.

The committee met with Rubina Khalid in the chair here on Monday where FBR gave briefing on reasons for withdrawal of customs duty exemption on the imported phone per calendar year under the personal baggage rules. A senior official of Pakistan Air Force (PAF) also expressed reservations over the imposition of duties on mobile phone imports, saying that officials with phones for defense purposes have been asked for registration which they cannot, and they faced great difficulties.

The member FBR informed the committee that the duty free allowance on import of mobile phone brought by international passengers was withdrawn vide amending SRO 689 (I) 2019 dated 29-6-2019. The said SRO was made effective from 1-7-2019. The reasons for withdrawal of duty free allowance were that the facility was being misused. Data of international arriving passengers was being stolen and the passport numbers and flight data were being used to enter data details in the Mobile Device Registration Software to claim exemption under the baggage rules.

He further said that expensive mobile devices were mostly being registered by using international passengers' data. Furthermore, the government desired that there should be uniformity in application of duty/taxes whether brought into Pakistan by passengers or locally procured and, therefore, the exemption was withdrawn to avoid this anomaly, he added. The FBR official said that around Rs 7-8 billion have been collected during this period from taxes on mobile imports.

However, the committee expressed serious annoyance over FBR's response while saying that instead of blocking loopholes in the system and improving check and balance, the Board took away the facility which has annoyed international passengers, especially overseas Pakistanis. The secretary MoITT said if a sector can contribute to the national economy in services and exports, it is none other but IT sector. He said if mobile manufacturing plants are not available, it is not feasible to import mobile phones with such taxes and duties. He said that the matter has been taken with chairman FBR. He further said that provincial governments, especially Punjab and Sindh, have imposed heavy taxes of 19 percent on services which are also affecting the entrepreneurs as well as overall IT sector.

Senators Faisal Javed and Shahzad Waseem said that mobile phones are not only for call but also for businesses. Javed said that after paying taxes, mobile phones become expensive in Pakistan and recommended for reviewing the policy.

The chairperson of the committee said that mobile handsets prices should be at par with other countries and there should be uniform price mechanism. The Air Force official also asked for developing software for example Pak-Chat on the pattern of V-chat and WhatsApp for defense purposes. Chairman Pakistan Telecommunication (PTA) Major General Amir Azeem Bajwa (retd) said that they are already working on this matter.

The Air Force official said that public Wi-Fi especially at airports should be banned as open Wi-Fi is major cyber threat. However, committee members rejected the proposal while saying that at all major airports across the world open Wi-Fi facility is allowed and the same facility should be ensured in Pakistan as well.

The committee was also briefed on the initiatives taken against those who were involved in misuses of data of Pakistani expatriates for registration of cell phones. The chairman PTA said that around 54,000 cases of misuse identity to avail FBR baggage rules for free registration of mobile devices were reported. The PTA has deleted the registered devices' IMEI under misuse and sent them for de-listing /blocking in the system. Furthermore, the PTA sends all logs and details to FBR /FIA for necessary legal action. Genuine passengers are informed to register the device under FBR baggage rules.

The acting director FIA Cyber Wing informed the committee that officials of Integrated Border Management System (IBMS) at airports and travel agents were found involved in data theft. He further said that so far 7 dealers were identified who were involved in the matter, he added.

The committee also questioned the PTA chairman for setting a system to monitor internet and call traffic which is a matter of great concern, besides rising questions of curb on freedom of expression and censorship. However, the chairman PTA said that the Authority has not set up any such system which is meant to curb freedom of expression and censorship, but affirmed that telecom operators' are assisting to curb grey trafficking as it is causing huge loss to the national exchequer.

The committee also expressed serious reservations over not framing of rules for Prevention of Electronic Crimes Act, 2016. The secretary IT said that they have finalized draft rules and sent to Law Ministry, which are expected to be finalized in one-and-a-half-month. The committee recommended that NDMA, Pakistan Metrological Department and Pakistan Air Force (PAF) should jointly develop early warning strategy to cope with disasters situation.

The committee said that all the resources are available to develop a joint mechanism, adding that they always failed to control disasters due to lack of coordination among the concerned departments. Earlier, senior officials of the ministry briefed the committee about the application of information technology for disaster management.