In the fiscal year 2023-24, the Government of Pakistan collected Rs92 billion in advance tax from mobile phone users, reflecting a 15% increase from the previous year’s Rs80 billion, according to the finance ministry.
This figure also shows significant growth from Rs61 billion in 2022, Rs55 billion in 2021, and Rs50 billion in 2020.
The finance ministry presented these statistics in a report to the National Assembly on Monday, detailing the advance tax payments made over the past five years. This advance tax is adjustable, allowing consumers to claim refunds when filing their income tax returns.
In the 2024-25 budget, the government has overhauled the previous sales tax system for mobile phones, which was based on a slab structure dependent on phone pricing.
The new regime implements a flat 18% ad valorem sales tax on all mobile phones valued up to $500. This rate applies to three categories: imported completely built, imported semi-built, and locally manufactured completely built phones.
For phones exceeding $500, the sales tax rates are set at 25% ad valorem for imported completely built phones and 18% for imported semi-built and locally manufactured completely built phones.
The finance minister explained in his budget speech on June 12 that the move to standardize the sales tax rate aims to eliminate market distortions created by concessionary rates, which previously benefited only certain items.
The new tax structure is designed to ensure fairness and allow market forces to function more effectively.
