Mobile phones have become an essential part of our daily lives. From communication to entertainment, we rely on them for various purposes. With the increasing usage of smartphones, the Pakistani government introduced a mobile handset levy through the Finance Act 2018, targeting high-end smartphones valued at over Rs 10,000. The aim was to generate revenue for the government and to discourage the import of expensive smartphones.
However, with the passage of time, the value of smartphones and the corresponding rates of levy have been proposed to be modified. In this article, we will discuss the changes in the mobile handset levy in Pakistan and how it affects the Pakistani consumers.
The Current Rates of Levy
Currently, the rates of levy applicable on smartphones with a C&F value in US dollars are as follows:
- Up to 30 – Rs. 100
- Above 30 and up to 100 – Rs. 200
- Above 101 and up to 200 – Rs. 600
- Above 201 and up to 350 – Rs. 1800
- Above 351 and up to 500 – Rs. 4000
- Above 501 and up to 700 – Rs. 8000
- Above 701 and above – Rs. 16000
The Proposed Changes in Rates of Levy
The government has proposed to modify the rates of levy based on the import value of smartphones, including duties and taxes. The proposed rates of levy are as follows:
- For sets having an import value between Rs. 10,000 and Rs. 40,000, the rate of levy will be Rs. 1000.
- For sets having an import value between Rs. 40,000 and Rs. 80,000, the rate of levy will be Rs. 3000.
- For sets having an import value exceeding Rs. 80,000, the rate of levy will be Rs. 5000.
Impact on Pakistani Consumers
The proposed changes in the rates of levy are likely to affect the Pakistani consumers in several ways. Firstly, the increased rates of levy on smartphones with higher import values will result in higher costs for the consumers. This might discourage people from buying expensive smartphones and might also affect the demand for smartphones in the Pakistani market.
Secondly, the changes in the rates of levy might affect the revenues generated through the mobile handset levy. The government might face challenges in collecting the levy from the consumers, especially those who import smartphones from abroad.
Thirdly, the changes in the rates of levy might also affect the smartphone industry in Pakistan. It might encourage local manufacturers to produce smartphones with lower import values, in order to avoid the high rates of levy. This might result in the growth of the local smartphone industry, providing more options for Pakistani consumers.
The changes in the rates of levy on mobile handsets in Pakistan are likely to have significant implications for the Pakistani consumers, the government, and the smartphone industry. While the aim of the mobile handset levy is to generate revenue for the government and to discourage the import of expensive smartphones, the proposed changes in the rates of levy might have unintended consequences. The government needs to carefully consider the impact of these changes and ensure that they do not have a negative impact on the Pakistani consumers or the smartphone industry in the long run.