The Federal Board of Revenue has implemented significant changes to its valuation ruling, offering a tax concession to overseas Pakistanis who bring used or refurbished mobile phones into the country. According to Valuation Ruling No. 1834 of 2023 by the Directorate of Valuation Karachi, the depreciation rates for such devices have been raised from 30 percent to 60 percent for the purpose of assessing duties and taxes.
This ruling translates into a favorable scenario for international travelers, particularly overseas Pakistanis, allowing them to import mobile phones up to five years old at reduced values. This not only results in cost savings for the importers but also alleviates the tax burden they would otherwise face.
It’s important to note that this tax relief does not extend to commercial importers, who are still obligated to pay duties and taxes based on relatively higher customs values.
Under the updated ruling, customs values for used or refurbished mobile phones imported by genuine passengers will be assessed, incorporating the allowance for depreciation into the tabulated values. The ruling includes a comprehensive list of brands and models, streamlining the process of assessing duties and taxes.
For models imported in commercial quantities but not explicitly covered by the ruling, clearance collectorates are instructed to assess them under Section 81 of the Customs Act, 1969. Following this, a reference will be sent to the Directorate for the final determination of values.
The ruling also aims to address the issue of under-invoicing, a practice involving the declaration of lower values for imported goods to evade taxes. It emphasizes the importance of consistent and uniform valuation methods, stating that the declared value should be accepted unless there is clear evidence of misdeclaration. This measure is intended to enhance transparency and discourage fraudulent practices in the importation of mobile phones.
In summary, the recent tax concession on mobile phones represents a positive development for overseas Pakistanis, offering financial relief and aligning with efforts to maintain fairness and integrity in customs valuation processes.