Government mulls 20% excise duty on imported mobile phones

The federal government is considering imposing a 20 percent federal excise duty (FED) on the import of completely built-up (CBU) mobile phones under a proposed policy framework aimed at promoting local manufacturing and increasing exports of refurbished devices.

The proposal is part of the Mobile and Electronics Manufacturing Framework finalised by the Engineering Development Board and is expected to be presented to Prime Minister Shehbaz Sharif for approval, according to a report by The Express Tribune.

At present, no federal excise duty is charged on the import of fully assembled mobile phones. The proposed 20 percent FED would mark a significant change in the existing taxation structure.

In addition, the framework suggests a 10 percent customs duty on fully built units of laptops, desktop computers and tablets. Duties on completely knocked down (CKD) units of these products would start at 5 percent and gradually increase to 10 percent.

The policy also proposes the establishment of a Rs56 billion technology investment fund to support domestic production of mobile phones and other electronic devices.

Another key feature of the framework is the re-export of refurbished mobile phones and laptops. Authorities estimate that 30 to 40 million devices could be processed annually, generating export revenues between $300 million and $400 million.

To facilitate this, the government plans to set up dedicated refurbishment facilities within export processing zones. These facilities would operate under customs supervision, with measures including IMEI registration and time-bound re-export requirements.

Two operational models are under consideration. One would allow temporary imports without foreign exchange payments, backed by bank guarantees. The second would permit commercial imports for refurbishment and subsequent export under bonded schemes.

The proposed measures are part of broader efforts to strengthen the domestic electronics manufacturing sector and enhance export earnings.