The Pakistan Telecommunication Authority has supported the rationalisation of duties and taxes on mobile devices to improve smartphone affordability, while arguing that any revised framework must also protect local manufacturing and discourage illegal imports.
The regulator’s position was set out in an official briefing prepared ahead of a meeting of the Senate Standing Committee on Cabinet Secretariat, where PTA and Pakistan Customs were expected to discuss the valuation of imported mobile phones, including older models, and the broader issue of tax rationalisation.
PTA clarified that its legal mandate is limited to the technical evaluation of mobile devices. The imposition, assessment, collection and administration of duties and taxes falls under the jurisdiction of the Federal Board of Revenue.
Affordability becomes part of the digital transformation agenda
Despite not having authority over taxation, PTA said it supports a more rational duty and tax structure for mobile devices in line with Pakistan’s digital transformation objectives.
The regulator’s position reflects a longstanding challenge in the local market: the cost of smartphones can act as a barrier to mobile internet adoption even where network coverage is already available.
Reducing the tax burden on devices could improve affordability and make it easier for more users to move from basic phones to smartphones, expanding access to digital services, payments, e-government platforms and online education.
The issue has become increasingly important as Pakistan seeks to accelerate digital adoption across a large population and expand participation in the digital economy.
PTA calls for balance between imports and local production
PTA stressed that any revised taxation framework should not focus on consumer affordability alone.
The regulator said policy should strike a balance between making smartphones more accessible and maintaining the sustainability of Pakistan’s local mobile phone manufacturing industry relative to completely built-up imports.
That distinction is important because lower taxes on imported finished devices could improve consumer pricing but also make it harder for locally assembled or manufactured phones to compete if the tax structure is not calibrated carefully.
Pakistan has spent recent years encouraging domestic handset assembly and manufacturing as part of efforts to reduce import dependence and build a local electronics ecosystem.
A more balanced framework would therefore need to consider the tax treatment of imported finished devices alongside locally produced handsets and their components.
Lower taxes could also reduce illegal imports
PTA also linked tax rationalisation with efforts to curb illicit activity in the handset market.
The regulator said a more balanced framework could discourage illegal imports and practices such as International Mobile Equipment Identity tampering.
High duties and taxes can create incentives for devices to enter the market outside formal import channels or for users and sellers to manipulate device identities in an attempt to avoid regulatory controls.
Reducing the gap between formal and informal market pricing could therefore help improve compliance while supporting legitimate retailers and manufacturers.
Imported handset valuation under review
The Senate committee meeting was expected to include a briefing from PTA and Pakistan Customs on how imported mobile phones are valued for taxation.
One issue under consideration is the revaluation of older handset models, where customs values may not always reflect current market prices as devices depreciate over time.
A more dynamic valuation framework could potentially reduce the tax burden on older smartphones, making them more affordable without necessarily applying the same tax reduction across all premium and newly launched devices.
The debate comes as Pakistan continues to import significant volumes of mobile devices, while also trying to increase domestic production.
Why this matters
Smartphone affordability is becoming an increasingly important part of Pakistan’s digital inclusion challenge.
Expanding 4G and 5G networks does not automatically translate into greater digital participation if a large segment of the population cannot afford capable devices.
At the same time, reducing taxes without considering domestic manufacturing could weaken a local industry that policymakers have spent years trying to develop.
The policy challenge is therefore not simply whether taxes should be reduced, but how they can be structured to improve affordability while preserving incentives for local production and reducing the attractiveness of illegal imports.
Editor’s note
PTA’s position highlights the tension at the centre of Pakistan’s mobile device policy.
The country needs cheaper smartphones to narrow the gap between network availability and actual internet usage, but it also wants to develop a sustainable domestic handset industry.
A successful tax framework would need to address both objectives. The strongest approach may be one that lowers the cost of entry-level and older smartphones, maintains a meaningful advantage for locally produced devices, and reduces the financial incentive for smuggling and IMEI manipulation.
