New Tax on Imported Phones: Big Impact or Minimal Hit?
New Tax on Imported Phones: Big Impact or Minimal Hit?

Local Manufacturing on the Rise as Imported Phone Prices Increase

Smartphone fans in Pakistan, listen up! The government recently implemented a new 17% sales tax on various items, including imported mobile phones. This move aims to meet International Monetary Fund (IMF) requirements. But how will it affect you?

Taxing Times for Imported Phones

While the tax applies to 150 items, the new regulation has sent ripples through the mobile phone market. Imported high-end phones are expected to see a price hike of around 30%. This is due to the combined effect of the 17% sales tax and an increase in fixed taxes for imported phones exceeding $200.

New Tax on Imported Phones: Big Impact or Minimal Hit?

Impact Softened by Local Manufacturing Boom

The good news? The surge in locally assembled phones might soften the blow for consumers. Pakistan’s mobile phone production has skyrocketed, reaching 24.66 million units in 2021 compared to just 10.26 million imported phones. This means a wider range of affordable, locally-made options are available.

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Local vs Imported: A Tale of Two Taxes

The tax burden on locally assembled phones is significantly lower compared to imported high-end devices. For instance, locally made phones under $100 only incur a tax of Rs.20! This makes them a more attractive option for budget-conscious buyers.

A Glimpse into the Future

Industry experts predict that locally assembled phones will soon account for 90% of the market, with Xiaomi joining Samsung in setting up local production facilities. This shift is expected to further stabilize prices for consumers.

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The iPhone Exception

There’s one exception to the local manufacturing trend: iPhones. Due to lower import volumes, local assembly isn’t feasible at present. This means iPhone users might have to shell out more for their favorite devices.

A Step Towards Self-Reliance?

While the new tax might sting for some, it’s seen as a positive step towards self-reliance in mobile phone production. With a thriving local industry, Pakistan can potentially reduce dependence on imports and create jobs within the country.

What do you think? Will the new tax significantly impact your phone purchase decision? Share your thoughts in the comments below!

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