In a recent move, the Federal Board of Revenue (FBR) has implemented changes in its valuation ruling, providing relief to overseas Pakistanis while maintaining the status quo for commercial importers in the mobile phone sector.
Under the newly introduced Valuation Ruling Number 1834 of 2023 by the Directorate of Valuation Karachi, incoming international passengers, especially overseas Pakistanis, are set to benefit from increased depreciation rates.
The ruling allows for a depreciation of up to 60 percent on used or refurbished mobile phones, a significant concession for those bringing in devices up to five years old.
No concession for commercial importers
Contrary to the favorable conditions for overseas visitors, commercial importers of new mobile phones will not enjoy any concessions under the revised valuation ruling. Duties and taxes will be levied based on comparatively higher customs values, with additional models being added to the assessment criteria.
The FBR's latest decision includes a comprehensive list of brands and models for assessing duties and taxes. For models imported in commercial quantities but not covered in the ruling, the clearance collectorates are advised to assess them under Section 81 of the Customs Act, 1969.
Subsequently, a reference will be forwarded to the Directorate for the final determination of values.
The new policy also aims to reduce the margin of under-invoicing, particularly in existing and new models of branded mobile phones. This initiative is expected to enhance transparency and streamline the valuation process for imported mobile devices.
Mixed reactions to FBR's decision
The FBR's decision has sparked mixed reactions, with overseas Pakistanis expressing relief at the increased depreciation rates, while commercial importers face continued challenges with higher customs values.
The impact of these changes on the mobile phone market remains to be seen as stakeholders assess the broader implications of the latest valuation ruling.
