Federal Cabinet Approves its First-Ever Mobile Device Manufacturing Policy

In its meeting today, the federal cabinet has approved the first-ever Mobile Device Manufacturing Policy. It is approved followed by a summary moved by the Ministry of Industries and Production.

The Engineering Development Board (EDB) prepared this policy that is a techno-economic arm of the Ministry of Industries and Production (MoIP). It was prepared through extensive consultation with relevant public and private sector stakeholders.

In its previously held meeting on 21st May 2020, the Economic Coordination Committee (ECC) approved the Mobile Device Manufacturing Policy which was further approved in the said meeting of the Federal Cabinet.

Minister for Industries and Production Mr. Muhammad Hammad Azhar congratulated his team. Also, he acknowledged the support from the Ministry of Commerce, Ministry of IT & Telecom, Pakistan Telecommunication Authority, Ministry of Planning, Federal Board of Revenue (FBR), and ECC consideration.

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The market has more than 40 million handsets. It has become a practical possibility primarily following the successful launch of Device Identification, Registration, and Blocking System (DIRBS) which eradicated the smuggling of mobile phones.

The important features of the policy include the removal of Regulatory Duty for CKD/SKD manufacturing by PTA approved manufactures under Input/Output Co-Efficient Organization (IOCO) approved import authorization, removal of the Fixed Income Tax on CKD/SKD manufacturing of mobile devices up to USD 350 category, increase in Fixed Income Tax on USD 351 -500 USD category by Rs. 2,000 and > USD 500 by Rs 6,300 on CKD/SKD manufacturing only, removal of Fixed Sales Tax on CKD/SKD manufacturing of mobile devices, PTA to permit activation of handsets manufactured in the country under import authorization of inputs by IOCO in CKD/SKD kit (8517.1211) and not under HS Code 8517.7000 i.e. parts.

Also, in up to USD 30 category, words “except smartphones” will be inserted for CBU imports under 8517.1219 to avoid misdeclaration.

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