In a letter to the finance minister, the president of the KCCI said that a delegation comprising importers and wholesalers of mobile phones, which was led by former president of the Karachi Electronic Dealers Association (KEDA), Muhammad Idrees, expressed deep concern over the increase in the sales tax on imported mobile phones, which has been raised to an unrealistic and exorbitant level in the recently announced Federal Budget 2017-18.
He said that the sales tax on mobile phone (feature category), which is comparatively a basic and cheaper phone, has been raised from Rs 300 to Rs 650 per phone, along with an additional regulatory duty of Rs 250, which means that the total taxes and duties have been raised by around 112 percent on an imported phone of Rs 800. This is sheer injustice not only to the traders concerned but also to the poor and downtrodden segment of society.
According to rough estimates, the government may not be able to earn much revenue by imposing exorbitant taxes and regulatory duties on mobile phones. In fact, this step will prove counterproductive as it will discourage legal imports and encourage smuggling, which will not only affect the local business activities and raise unemployment but also result in loss of revenue to the national exchequer, he added.
He expressed the hope that in view of the hardships being faced by the traders concerned, the government will pay attention to this serious issue by restoring the sales tax of Federal Budget 2016-17 on all three categories, whereas the Sales Tax on feature phone (Category A) will also be reduced to Rs 150 per phone.
Copyright Business Recorder, 2017