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The recent tax hikes on mobile phones, as announced in the budget, have clearly impacted the market, with various smartphone companies raising their prices. However, the price increases are significantly higher than anticipated. While the tax increases play a role, there may be additional hidden levies that haven’t been disclosed.

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The government announced a 1% increase in the ad valorem sales tax on smartphones priced below $500, while the tax rate on smartphones priced above $500 remained unchanged at 25%. Despite this, the actual price hikes are much greater than the announced tax changes.

Infinix Smart 8 Plus 23,999 26,999
Infinix Hot 40i 31,999 36,999
Tecno Pova Pro 5G 40,999 46,999
Samsung Galaxy A25 90,500 98,500
Samsung Galaxy A35 104,999 119,999
Samsung Galaxy A55 120,999 139,999
Samsung Galaxy A34 114,999 116,999
Samsung Galaxy A54 140,999 140,999
Samsung Galaxy S23 ULTRA 339,999 382,999
Samsung Galaxy S24 269,999 289,999
Samsung Galaxy S24 ULTRA 399,999 434,999
Samsung Galaxy Z Flip 5 334,999 368,999
Samsung Galaxy Z Fold 5 559,999 626,999

To illustrate, smartphone companies in Pakistan have announced substantial price increases. For lower-end smartphones, the price hike is around 6%, whereas flagship phones have seen a rise of about 12%. The basis for these price changes remains unclear. While taxes are certainly a factor, there appear to be other undisclosed reasons contributing to the significant price increases.

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