Tax mobile phone sales

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Pakistan’s FBR is looking for new ways to collect tax on luxury items. One suggestion would be to control tax collection at the source for mobile phones sold in Pakistan. Mobile phones are extensively used and therefore have a very healthy demand in Pakistan. Many shady businessmen in Pakistan import and sell mobile phones in Pakistan without paying any taxes on them, using the “grey trade route” of Dubai.
The FBR can collect taxes on all these phones from the importers by simply checking the IMEI number listed on any mobile phone, with its respective brand company. The company should be able to tell the FBR, who bought the mobile phone and when. It would also show them any other mobile phones bought by the same person on the same day. If the purchase was for a larger number of phones, that would indicate that the purchaser is selling the phones and the transaction details would also carry the NIC or Passport number of the said person, making it easier for the FBR to track tax dodgers.
Most of the mobile phone brands already have registered offices in Pakistan, with a few exceptions, for example, in 2010 Sony Ericsson mobile phone company closed their office when they were sold to Sony. After which now all new mobile phones carry the brand “Sony Mobile” only. And although Sony has a registered company in Pakistan, with local offices, Sony does not sell its mobile phones in Pakistan. Instead all the Sony mobile phones are being imported from Dubai via illegal smugglers and than sold in Pakistan through local shops, without paying any taxes on them. Sony can be asked to declare their customers, for any mobile phone found in Pakistan, and they can be asked to sell their mobile phones through the proper channels in Pakistan or pay a fine.
By using regulatory institutes like PTA to enforce laws or systems that can stop illegal or non-duty paid mobile phones from working on Pakistani telecom systems, the FBR would be able to create a regular stream of revenue for the country.
Shahryar Khan Baseer
Peshawar, Pakistan

1 COMMENT

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