So the Federal Board of Revenue (FBR) are bringing forward a plan which is to reduce the regulatory duty (RD) on the import of mobile phones and in some cases this RD may even be reduced by as much as 50 per cent, the Board have said that this move is being considered in order to “provide relief to the common man and to support digitisation endeavours.”Moreover,according to FBR this move will have no significantimpact in overall collection of duties as the board believes that this decision will lead to higher volume of imports.
“This reduction in duty/tax is expected to increase import volume of mobiles in Pakistan,” said FBR Chairman Shabbar Zaidi. This may “to some extent, neutralise the otherwise negative impact of this measure.”Duties and taxes on mobile phones were reduced in the last budget announced in May.Changes also proposed on duties on used clothes and polyester fibre
One of the most evident reduction in RD will be seen on the mobile handsets which have been priced in between$100 and $200, for which the current RD rate is Rs2,430 which will in turn be reduced to only Rs 12oo by the FBR., In addition to things the new decision will in the long run also help in reducing the overall price of mobile phones in the market, however it may be a disincentive for local assembly manufacturers, say businesspersons who are in advanced stages of setting up local mobile phone assembly plants in the country. On the occasion one business man was reported to have said that “This will effectively kill smartphone local assembling feasibility,”
Must Read: FBR plans to reduce duty on the import of mobile phones in Pakistan
Industry sources have also reported to the media agency,Dawn that a mobile phone manufacturing policy is being finalised by the Adviser to PM on Commerce Razak Dawood in collaboration with the Engineering Development Board. Assembly of mobile phones is one of the industries that is potentially being moved out of China, providing opportunities for other countries to attract investment in the sector.
On top of that this summary has also suggested to end the the RD which is currently imposed on the “worn clothing and other worn articles”, presenting the argument that “these clothing articles are used by low income people”. As of the moment such clothes are subject to a relatively low but nonetheless present and applicable RD.Finally the plan seems to be decided by the board however an approval from the Finance Adviser Hafeez Shaikh will be needed in order to pass the new regulations for both proposals,
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