ISLAMABAD (News Desk) –The Federal Board of Revenue has significantly revised customs valuation on imported used mobile phones, a move that is expected to raise prices of at least 62 models and alter market dynamics across the country.
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Under the new policy, the Directorate General of Customs Valuation has introduced updated benchmarks for calculating duties and taxes on imported mobile devices. In simple terms, “customs valuation” refers to the government’s assessed price of an imported item, on which taxes are applied. By increasing this assessed value, the total tax burden on importers rises—even if the actual purchase price remains unchanged.
Officials say the revision is based on fresh market analysis and import data, aiming to align declared values with prevailing international prices. The updated framework applies uniformly to all used mobile phones, meaning the condition of the device—whether slightly used or heavily worn—will no longer influence tax calculations.
A key requirement introduced under the new rules is that all imported used phones must have been activated at least six months prior to import. Importers are now obligated to provide proof of activation, ensuring that only genuinely used devices enter the country. Authorities believe this measure will help curb misuse of the “used phone” category, which has sometimes been exploited to import new or near-new devices at lower tax rates.
The revised policy has been formalised through Valuation Ruling No. 2070, replacing the earlier system. With higher valuation benchmarks in place, the cost of importing second-hand smartphones is expected to rise considerably—an increase that will likely be passed on to consumers in the form of higher retail prices.
Impact on consumers and market
For consumers, particularly those in lower- and middle-income groups, the decision could make affordable smartphones harder to access. Used and refurbished devices have long served as a cost-effective alternative to brand-new phones, especially in a market where currency depreciation and high taxes already make electronics expensive.
Market analysts warn that the price hike may reduce purchasing power and shift consumer behaviour. Buyers may either delay upgrades, opt for lower-spec devices, or turn to unofficial markets where prices could remain comparatively lower but come with risks such as lack of warranty or PTA approval issues.
At the same time, the policy could benefit authorised dealers and local distributors of new smartphones, as the price gap between used and new devices narrows. This may encourage more consumers to purchase officially imported phones, potentially boosting documented sales and tax revenues.
Impact on traders and importers
Small-scale importers and traders are expected to face the biggest challenge. Higher taxes increase upfront costs, reduce profit margins, and may discourage bulk imports. Some traders could scale down operations or shift to alternative business models, including sourcing locally assembled devices.
However, larger importers with better financial capacity may adapt more easily, absorbing costs or passing them on to consumers while maintaining supply chains.
Government perspective
Authorities maintain that the revised valuation is part of broader efforts to enhance transparency and standardisation in the import regime. By aligning customs values with real market trends, the government aims to prevent under-invoicing and revenue leakage.
Officials also argue that stricter documentation requirements, such as mandatory activation proof, will improve regulatory oversight and ensure fair competition between importers.
Broader economic implications
The move comes at a time when Pakistan is striving to increase tax collection and formalise its economy. While the policy may boost government revenues in the short term, its long-term success will depend on how effectively it balances revenue goals with consumer affordability and market stability.
If prices rise too sharply, there is a risk of increased smuggling or growth in grey markets—an outcome that could undermine the very objectives the policy seeks to achieve.
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