It is recently reported that the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and Karachi Electronics Dealers Association (KEDA) have urged the government of Pakistan to drop sales tax on mobile phones. For those who are wondering, the reason why FPCCI and KEDA have asked for the reduction in sales tax on mobile phone is because higher rates promote smuggling.
In an appeal to Finance Minister Ishaq Dar and Prime Minister Nawaz Sharif, KEDA and FPCCI asked to reduce sales tax on feature phones to PKR 150 as these are comparatively basic and cheaper phones. Moreover, in the Federal Budget 2017-18 the tax on feature phones has been raised to PKR 650 per mobile phone.
The sales tax imposed on mobile phones (featured category) has been increased from PKR 300 to PKR 650 per mobile phone along with additional regulatory duty of PKR 250. This depicts that the total taxes and duties have surged by almost 112% on imported mobile phones, which is unfair not only for the concerned traders but also for the customers.
Former president of Karachi Electronic Dealers Association (KEDA) Muhammad Idrees said:
“In fact, this step will prove counterproductive as it will discourage legal imports and encourage smuggling, which will not only affect the local business activities and raise unemployment but will also result in loss of revenue to the national exchequer.”