HIGH TAXATION ON CELL IMPORTS ENCOURAGES SMUGGLING
May 18 - 24, 2009
High taxation on mobile phone imports is encouraging pre-launch smuggling into Pakistan markets from neighbouring countries, therefore, the government needs to abolish stringent taxation in the budget 2009-10. Different companies are pressing the federal government to either remove or make a sizeable reduction in import taxes on below $100 of phone sets to ensure their affordability.
Experts believe that the government may continue taxing the import of expensive sets, which surely fall in the ambit of luxury items. The low-cost mobile sets have become essential items with its increasing usages and should be removed from the list of luxury items, they added. They expressed apprehensions over the decline in import of mobile phones by 76.03 percent during the first nine months of the current fiscal year as compared to the last fiscal year.
According to them, broadband services have potential to lift up the socio-economic conditions of the country and these can be utilised to enhance usage of information in different spheres of life. Effective measures are needed to bring broadband revolution in Pakistan. Apart from cut in rates, the growth of broadband is also dependent on development of local contents and applications for users. If contents are prepared locally they can help in bringing awareness and education among the public. The Pakistan Telecommunication Authority (PTA) needs to facilitate growth of various telecom services including broadband. Officials in the PTA told PAGE that some operators have launched Wimax Broadband services, while Telecard and Wi-tribe are preparing to launch these services. "PTA has also formed a Broadband Stakeholders Group to enhance the industry co-ordination for the promotion of broadband services. The operators should also make their awareness and marketing campaign effective to attract new users," they added.
According to them, few of PTA's recent achievements include Mobile Number Portability (over 400,000 ported subscribers), new SIM verification system (11.2 million un-registered numbers blocked), AJ&K Licensing, Rural Telephony (349 Rabta Ghar installed), Gray Traffic Monitoring, and provisioning of Free Dial-up services.
According to experts, the teledensity in Pakistan has reached 60 percent, but high taxes are proving to be a hurdle in further growth. Dealers of mobile handsets have proposed policymakers to reduce duties on cell phones in order to minimise the burden on customers and to increase business in the country.
According to the Federal Bureau of Statistics (FBS), mobile handset imports decreased significantly by 76 percent in the three quarters of the current fiscal year 2008-09. During July-March 2008-09, the value of mobile handset imports contracted to $139.480 million, against $581.807 million in the corresponding period of last fiscal year.
As part of its budget proposals, Nokia had requested the Ministry of Finance a method of taxation to 'do away with one duty for all mobile phones' and provide relief to cell phones valued under $100.
A spokesman of Nokia said that they had proposed the government to reduce taxes on mobile phones, as they were a necessity than a luxurious item. Global recession had affected Nokia's expansion plans, forcing it to trade cautiously, as the world's economy was down, he added.
Further, he said that though his organisation had postponed some of their future plans for the time being owing to global crises, they were focusing on optimising current capacity and adjusting cost structures of their products to remain competitive in the market and on remaining cost effective for their consumers.
'The mobile handset having value of under $100 could not be luxurious item,' he said and added that the government should exempt and reduce the duties on small sized mobile sets so that it could be used by the low income group of the country.
The spokesman also stated that the government should not impose duties more than Rs300 on medium sized sets as well so that it can also generate revenue from its imports and sales.
BANKNOTES WITH SYED SALIM RAZA'S SIGNATURE
The State Bank of Pakistan will issue the banknotes bearing the signature of Syed Salim Raza, Governor, State Bank of Pakistan from the field offices of SBP Banking Services Corporation (Bank) last week.
These banknotes are in the same denomination, colour, design and size as the existing new design banknotes. The banknotes bearing the signatures of his predecessors will also continue to remain in circulation as Legal Tender.