Tensions are brewing between Pakistan Mobile Phone Manufacturers Association (PMPMA) and Federal Board of Revenue (FBR) over a proposed increase in mobile phone tariffs.
Federal government is contemplating imposing an 18% sales tax on mobile phone assembling units in the upcoming budget. This move has sparked concerns within the industry, with the PMPMA urging the FBR to uphold government commitments made to investors.
The PMPMA delegation, during a recent meeting with FBR officials, expressed anxieties that a tax increase would disrupt localization plans and hinder Pakistan’s mobile phone export ambitions. They emphasized that implementing an 18% sales tax across the board for domestically assembled phones would be detrimental to the industry.
Pakistan’s Mobile Device Manufacturing Policy (2020) currently exempts phones priced under $350 from the 18% sales tax, while higher-priced models bear the full burden. The PMPMA highlights that this tax exemption applies to roughly 55% of smartphones used in Pakistan, which are predominantly assembled by local companies.
The Association argues that a tax increase would cripple this crucial segment of the market, potentially leading to price hikes and decreased affordability for consumers.
Coming days will be crucial as FBR deliberates on the proposed tax structure for mobile phones. The outcome of these discussions will significantly impact the future of mobile phone manufacturing and affordability in Pakistan.
