Mobile phone imports in Pakistan have increased by 5.11 percent during the first eleven months (July-May) of the current financial year (2015-16) as compared to the same period of previous year.
According to the Pakistan Bureau of Statistics (PBS), total imports of mobile phone stood at $687.249 million while they were $653.813 million in the same period last year.
Overall telecom imports saw decline of 0.66 percent during July-May 2015-16 compared to the same period in the last year. Total imports were recorded at $1.256 billion compared to $1.265 billion in the same period in the last year.
Other telecom apparatus import also witnessed significant decline of 6.84 percent during this period as it stood at $569.459 million during July-May (2015-16) against $611.277 million during the same period of last year.
Finance Minister Ishaq Dar in his budget speech had announced that in order to stop mis-declaration and to bring the tax structure in line with market prices, the rates of sales tax on mobile phones are being rationalized.
The existing sales tax rates of Rs. 500 and Rs. 1,000 are proposed to be increased to Rs. 1,000 and Rs. 1,500 for medium and high category mobile phones respectively. The rate of tax on low category mobiles will remain unchanged at Rs. 300.
However, analysts say that with increase of tax rate, mobile import through proper channel will decrease, thus depriving the government of revenue as it would result in the increase of smuggled mobiles.
According to Federal Board of Revenue (FBR) assessment, the country sustained $1.1 billion losses due to smuggling of mobile phones last year.
Further, the increase in mobile prices is expected to hinder the growth of 3G/4G technology in the country.
The Government believes in cutting the nose to spite the face!
They keep on increasing duties and taxes on legal imports and play into the hands of the smuggling ‘bradri’! There is so much data of over the last five years and the importers have repeatedly shown the data to them, but the FBR is not driven by logic – only to meet the demands of the government to show a high collection of taxes. Wah! Wah!
Mr. Hannan of Advance Telecom has a detailed assessment, but who will listen?
I am doing a country report on Pakistan these days and the evidence is so great that it beggars imagination as to why the politicians cannot (or do not) want to really have progress. Only two reasons come to mind: they are either totally incompetent or are complicit with the smugglers – over a billion dollars a year is a real boondoggle!