Locally assembled /manufactured phones are exempted from withholding tax on domestic sales.

INCOME TAX MANUAL

PART I

INCOME TAX ORDINANCE, 2001

153. Payments for goods, services and contracts.— (1) Every prescribed person making a payment in full or part including a payment by way of advance to a resident person [ ] [ ] —

(a) for the sale of goods [including toll manufacturing] [, except where payment is less than seventy-five thousand Rupees in aggregate, during a financial year];

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PART IV

EXEMPTION FROM SPECIFIC PROVISIONS

Income, or classes of income, or persons or classes of persons, enumerated below, shall be exempt from the operation of such provisions of this Ordinance, subject to such conditions and to the extent, as are specified hereunder:-

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(119) The provisions of section 153(1)(a) shall with effect from the first day of July, 2020 not apply to distributors, dealers, wholesalers and retailers of locally manufactured mobile phone devices as withholding agent

Sources:

Section 119 of Part IV, of the Income Tax Ordinance 2001

https://download1.fbr.gov.pk/Docs/20217141672549772IncomeTaxOrdinanceAmendedupto30.06.2021.pdf

Details

Regarding Income tax, the withholding tax on domestic sales of locally manufactured mobiles phones is exempt.