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.
| MODEL | OLD RRP (PKR) | NEW RRP (PKR) |
|---|---|---|
| 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.
