The government has announced a 20 percent reduction in regulatory duty on imported mobile phones as part of the 2026-27 federal budget, a move expected to lower the cost of high-end smartphones by up to Rs. 14,000 from July 1.
Speaking before the National Assembly Standing Committee on Finance, FBR Chairman Rashid Mahmood Langrial said the duty cut is part of the government’s tariff rationalization strategy aimed at streamlining import taxes while maintaining overall revenue stability.
Despite the relief, Langrial recommended retaining the existing tax structure on imported mobile phones, arguing that the current system is progressive, equitable, and continues to generate strong revenue. He opposed major changes to the duty bands, stating that premium smartphones contribute a significant share of import tax collections.
According to the FBR, nearly 95 percent of mobile phones used in Pakistan are locally assembled, while only around 5 percent are imported. The chairman suggested that any future tax relief should primarily target entry-level imported devices priced between $31 and $200, as such measures would benefit price-sensitive consumers and first-time smartphone buyers at a relatively low cost to government revenue.
He also emphasized the importance of supporting local manufacturing through the CKD/SKD regime, which has helped make smartphones more affordable for the broader population.
Recent import data shows strong growth in Pakistan’s smartphone market. Mobile phone imports increased by 61 percent during the year, rising from 640,000 units to 1.04 million units. Meanwhile, the total value of imports surged by 137 percent, while tax collection from imported phones climbed 136 percent to Rs. 36.9 billion.
The FBR noted that the growth was largely driven by demand for higher-end smartphones, while imports of low-cost feature phones declined as consumers increasingly shifted toward smartphones.
According to official figures, flagship smartphones priced above $500 account for only 16 percent of imported units but generate 58 percent of total import tax revenue, contributing Rs. 21.6 billion out of the Rs. 36.9 billion collected at the import stage.
Langrial warned that further reductions in duties on premium devices would mainly benefit affluent consumers while significantly reducing government revenue, with little impact on the broader mobile phone market that is largely served by locally assembled devices.
