The federal government has decided to reduce regulatory duty on imported mobile phones by 20% in the budget for the next fiscal year, a move expected to significantly lower the prices of expensive and high-end devices imported into the country.

According to sources, the decision is expected to reduce the prices of imported mobile phones by around Rs10,000 to Rs14,000, providing direct financial relief to consumers.

Market participants said the reduction in regulatory duty would lower the cost of imported phones, ultimately affecting retail prices.

Briefing the National Assembly Standing Committee on Finance, Federal Board of Revenue (FBR) Chairman Rashid Mahmood Langrial said the 20% reduction in regulatory duty on imported mobile phones would take effect from July 1, 2026.

He said the measure was likely to reduce the price of expensive imported mobile phones by about Rs14,000 per device.

Presenting recommendations related to the Finance Bill 2026, Langrial said the current tax structure on imported mobile phones was balanced, fair and effective for government revenue, adding that there was no need for further changes to the existing rate system.

He said a large-scale reduction in duties on expensive or premium imported mobile phones would primarily benefit affluent consumers while potentially causing significant losses to the national exchequer.

Any additional relief, he said, should be limited to entry-level mobile phones priced between $31 and $200 to benefit low-income consumers and first-time smartphone buyers.

National Assembly member Qasim Gilani described the development as positive, saying that while the measures were not entirely satisfactory, they represented an important step in the right direction.

Announcing the abolition of regulatory duty on mobile phones on the social media platform X, Gilani said the move was positive for increasing connectivity and improving public access to technology.

Imported mobile phones in Pakistan are subject to various taxes, including General Sales Tax (GST), Regulatory Duty, Mobile Device Levy and Withholding Tax, which significantly increase the prices of legally imported devices.

According to Gilani, before the amendments, the total tax burden on the base price of a mobile phone could reach about 63%.

He said that for a mobile phone priced at 200,000 rupees, the tax amount could be about 106,000 rupees.

Gilani said the Parliamentary Finance Committee had recommended in March that mobile phones be treated as a basic necessity rather than a luxury item, arguing that they had become essential for education, business and daily communication.

When those recommendations were not included in the budget presented this month, lawmakers challenged the 25% luxury GST and other import barriers through amendments to the Finance Bill. Following the debate, the FBR accepted several proposals.

According to Gilani, the government has agreed to a 20% reduction in regulatory duty on all imported smartphones, reducing the tax burden across different price categories.

The FBR has also approved an amendment for mid-range mobile phones priced between $200 and $300, a segment that includes some of the best-selling devices in Pakistan.

Officials said the concession could have a revenue impact of about 1 billion rupees.

However, smartphones priced above $500 will remain subject to the 25% luxury GST and will only benefit from the 20% reduction in regulatory duty.