In the new budget for the fiscal year 2015/16, the government of Pakistan has doubled the sales tax on mobile phones.
Depending on the features in the mobile phones, the tax has increased to Rs. 300, 500 and 1000 from Rs. 150, 250 and 500 respectively. This tax is in addition to the SIM activation tax, which telcos already pay out of their pocket.
While the numbers may seem small, the worst affectees of this tax hike are going to be low income individuals and the low end market segment. Smartphone growth is all great but the true potential lies in connecting the unconnected and anything that draws them further away from technology should face tough questions.
We recently broke the news that Punjab is introducing a 19.5% tax on internet usage and this development serves as another blow to an industry already reeling from shock. With the cost of internet going up and cost of phones rising as well, you have to question what’s the logic behind it all.
The growth in number of internet users has been quite remarkable with 3G/4G numbers rising to 13 million recently. With a continuation of discouraging policies, the government is posing a real threat to all that has been accomplished and could be accomplished.