ISLAMABAD: A new levy of up to Rs16,000 has been proposed on the import of mobile phone handsets and increased Federal Excise Duty (FED) on telecommunication services from 16 percent to 19.5 percent within the Islamabad Capital Territory (ICT) through Finance Bill, 2022.

According to the Finance Bill, there shall be a mobile handset levy at the rates specified on smartphones of different price categories.

The government has estimated a revenue of Rs10 billion from the levy on the import of mobile handsets in the next financial year against Rs9 billion in the outgoing fiscal year. Under the proposal, there will be a levy of Rs100 per set on a mobile phone with cost and freight (C&F) value of up to $30. The rate of levy per set on mobile phones having a C&F value between $30 and $100 will be 200. The rate of levy per set on mobile phones having a C&F value between $101 and $200 will be 600.

Jul-Apr mobile phone import grows 7.43pc to $1.81bn YoY

Further the rate of levy per set on mobile phones having a C&F value between $201 and $350 will be 1800. The rate of levy per set on mobile phones having a C&F value between $351 and $500 will be 4000. The rate of levy per set on mobile phones having a C&F value between $501 and $700 will be 8000. The rate of levy per set on mobile phones having a C&F value of above $701 will be 16,000. The government has proposed to raise the Federal Excise Duty (FED) on telecommunication services from 16 percent to 19.5 percent in federal capital in the federal budget for the fiscal year 2022-23.

Last year, the federal excise duty on telecom services was reduced to 16 percent from 17 percent by the previous government to facilitate businesses and provide relief to the masses. For fiscal year 2023, the FED on telecom services has been increased and is expected to put pressure on businesses and most definitely the end-user.

Copyright Business Recorder, 2022