— Smartphone prices to shoot-up following the new duty
ISLAMABAD: In a move to reduce the ever-rising import bill against exports, the government is going to impose 50 percent regularity/customs duty on import of mobile phones which will cause prices of the smartphones to increase.
According to reliable sources, a high-level meeting at the ministry of commerce was held recently in which it was agreed that measures will be taken to reduce imports as the rising trade imbalance is alarming for the government. The meeting which was chaired by Secretary Commerce Younus Dagha was also attended by Federal Board of Revenue (FBR) Chairman and other officials.
Apart from others measures proposed to be taken, sources claimed, the government was considering to impose 50 percent regularity duty on imports of smartphones to discourage imports, as well as boost locally, assembled phone sets. However, customs officials feared that the move will increase smuggling of mobile phones. Apart from the legal mobile imports, thousands of used and refurbished mobiles are smuggled into the country using different channels.
These concerns were rejected and customs were advised to take required steps to control smuggling. However, this would help locally assembled Chinese phones to capture local markets. It was discussed that spending of almost $ 1 billion on imported handsets is a burden on foreign reserves and is also increasing the trade deficit, adding that exponential growth in the telecom industry was also burdening the overall imports.
In the 2017-18 budget, customs duty was dropped from Rs 1,000 to Rs 650 on smartphones which increased imports of cell phones to $ 68.57 million in July 2017 as compared to $ 46.204 million in July 2016. These include smartphones imported through the legal channels which were charged sales tax at the rates of Rs 300, Rs 1,000 and Rs 1,500 per mobile phone set depending upon the phone category they belonged to.
In FY2016-17 the overall mobile imports were recorded at $ 709.69 million compared to last year’s $ 753.224 million.
Introduction of next-generation technologies in Pakistan has pushed the import bill up as people tend to buy updated technology, making 3G & 4G successful in Pakistan. According to industry sources, Pakistan is the 9th major user of mobile phones in the world where the US, China, India and Japan are included in top 10 countries.
