In a recent development, the Federal Board of Revenue (FBR) has implemented changes in its valuation ruling, introducing adjustments that offer benefits to overseas Pakistanis while maintaining the existing framework for commercial importers in the mobile phone sector.
With the introduction of Valuation Ruling Number 1834 of 2023 by the Directorate of Valuation Karachi, incoming international passengers, especially overseas Pakistanis, are poised to gain advantages from increased depreciation rates.
The ruling permits a substantial depreciation of up to 60 percent on used or refurbished mobile phones, a significant relief for those bringing in devices that are up to five years old.
No Concession for Commercial Importers
In contrast to the favorable conditions for overseas visitors, commercial importers of new mobile phones will not receive any concessions under the revised valuation ruling. Duties and taxes will be imposed based on comparatively higher customs values, with additional models incorporated into the assessment criteria.
The FBR’s latest decision encompasses a comprehensive list of brands and models for evaluating duties and taxes. For models imported in commercial quantities but not covered in the ruling, clearance collectorates are instructed 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 curb under-invoicing margins, especially in existing and new models of branded mobile phones. This initiative is anticipated to enhance transparency and streamline the valuation process for imported mobile devices.
Mixed Reactions to FBR’s Decision
The FBR’s decision has elicited mixed reactions, with overseas Pakistanis expressing relief at the increased depreciation rates. Meanwhile, commercial importers find themselves grappling with ongoing challenges due to higher customs values.
The impact of these changes on the mobile phone market remains uncertain as stakeholders evaluate the broader implications of the latest valuation ruling.
