Pakistan’s computer parts and hardware sector has always struggled due to higher prices (as compared to international prices). It has been limited to purchasing expensive hardware that does not really provide value for its cost.
This is due to the fact that most if not all the parts are imported from overseas, and the taxes on them is considerably high. This will change this year, as the government has assured to grant tax exemption on computer-part imports and will implement these changes in the 2018-19 budget.
General Sales Tax of 17% on imported computer parts will now be exempted.
Pakistan Computer Association’s (PCA) chairman, Munawar Iqbal, has been recommending the government to exempt General Sales Tax (GST) in order to help the industry thrive in Pakistan.
Discouraging Illegal Imports
This is a bold move, beneficial to both consumers and authorities alike. High import costs have always encouraged illegal trading and smuggling of goods from the borders. If legal trading becomes just as incentivized, illegal imports will decrease and become “uncompetitive”.
Earlier, importers had to pay a daunting 17% GST on hardware imports. This, in turn, resulted in higher market prices of assembled units and hardware alike.
Forward Into The Future
Haroon Akhtar, Special Assistant to the Prime Minister on Revenue, assured that the government is looking to make the computer industry better so that it can work on par with other, more developed countries. He said,
The computer industry is the future of Pakistan and the government is committed to providing it all possible incentives so that every person in the country can afford to buy a computer at affordable rates,
The government is also working to overhaul the industry and is ready to take proposals from relative authorities to include in the upcoming federal budget. Haroon Akhtar added,
We want to protect and promote the local industry so that the import bill on the purchase of computers can come down and the local industry can also enjoy a competitive edge vis-a-vis multinational companies currently supplying computer machines and spare parts in the market.
This is good news for computer enthusiasts as it will definitely decrease prices for hardware bought and sold in Pakistan. The current prices are much higher than international prices due to import costs, rupee’s devaluation against USD, and retailer margin.