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The Federal Board of Revenue (FBR), the tax collection department in Pakistan, has increased the customs values ​​of imported smart watches, smart bands and smart rings to prevent under-invoicing and protect the national exchequer from loss.

According to the new ruling issued by the Directorate General of Customs Valuation, a subsidiary of the FBR, under the Customs Act 1969, the revised prices will apply to all ‘non-GSM wearable devices’ imported to Pakistan from all over the world.

 It should be noted that ‘non-GSM’ refers to smartwatches or bands that do not have the facility to insert a SIM card and work through Bluetooth or Wi-Fi instead of being independently connected to a cellular network.

According to sources, the directorate has divided imported brands into three different categories based on their quality and price.

Category A includes popular and mid-priced brands such as Xiaomi, Redmi, Oppo and Vivo, etc. The customs value for them has been set at $5 per item.

Category B includes brands such as Danny, Faster, Ronin, Zero and Log-in, whose customs value has been set at $3.

Category C includes common and cheap brands whose value has been set at $1.50 per item.

 

Heavy tax on premium brands

 

The FBR has also clarified that the world’s most expensive premium brands, including Apple, Samsung and Huawei are not part of the list.

The agency says that tax will be levied on these brands as per their actual international value, which is much higher than the above values.

According to the directorate, this decision has been taken because these items were being imported at a much lower price than the actual value in the import documents. ‘This was causing the government huge losses in terms of tax. The FBR has now fixed a minimum price for them, according to which tax will be collected.’

 

Officials say that the new prices have been determined after examining import data, detailed market inquiry and comprehensive consultation with the concerned parties. However, experts believe that the increase in customs value will increase the duties and taxes levied on these devices, which is likely to result in an immediate increase in the prices of smartwatches and bands in the local market.

Market sources say that there is a possibility of an immediate increase in the prices of smartwatches and bands by 15 to 20 percent, which will make it more difficult for the middle class to access affordable and quality technology.

Especially the prices of popular brands included in Category A, which were already under pressure due to the increase in the value of the dollar, will now increase further, which will affect the purchasing power of buyers.