Mobile phone imports in Pakistan registered massive decline of over 29 percent in the first month (July) of current fiscal year 2016-17 after the government doubled sales tax for medium and high category/smart phones import.
The government has doubled sales tax i.e. from Rs 500 and 1000 to 1000 and 2000 respectively for medium and high category/smart phones on the import of mobile phone sets in budget (2016-17). The outcome in this regard has automatically been passed on to the consumers; directly hitting Mobile Phones imports and rates.
According to the Pakistan Bureau of Statistics (PBS), total imports of mobile phone stood at $46,201 in the month of July 2016 against $65,974 in the previous month of June 2016. However it increased by 1.84 percent as compared to $45,368 during the same period of previous year i.e. July 2015.
Overall telecom imports saw decline of 31.54 percent during July 2016 compared to the previous month of June 2016. Total imports were recorded at $74,261 during July 2016 compared to $108,628 in June 2016, while registered 5.13 percent decline as compared to $78,277 during July 2015.
Other telecom apparatus import also witnessed significant decline of 34 percent during the first month of current financial year as it stood at $28,060 during July 2016 against $42,654 in June 2016. When compared to the previous year other telecom apparatus imports registered 14.73 percent decline as it was $32,909 in July 2015.
According to analysts, telecom sector has become saturated with respect to infrastructure investment and other apparatus, therefore the decline in overall telecom import is justifiable.
However, in the next two years, smartphones are expected to cross 55 percent of mobile phone imports. Smart phone adoption in Pakistan is expected to grow due to expanding 3G and 4G networks (currently 3G services are available in more than 200 cities and towns) and more affordable Smartphones are available in the market.
However, the increase on phone imports by the government may discourage the import through proper channel and result in increasing of smuggling, which is evident from the latest figures released by PBS.