Computer industry: Association demands tax rationalisation

Calls for fixing duty rate at Rs3,000 on import of laptops, computers.

ISLAMABAD: The Pakistan Computer Association (PCA) has proposed rationalisation of the existing tax structure in order to generate more revenue for the government.

The association has carried out a detailed analysis and comparison of imports made by people in documented and undocumented sectors for the Ministry of Finance and Federal Board of Revenue (FBR).

PCA Chairman Munawar Iqbal, while presiding over a meeting, said the working paper would provide an opportunity to the government to simultaneously achieve two objectives – bring in the formal sector all importers in the computer industry and achieve a major jump in revenue collection from the sector in 2015-16.

The FBR is reviewing a proposal of the computer industry that calls for fixing duties and taxes at Rs3,000 on the import of laptops and desktop computers in the budget for 2015-16 to generate additional revenue. It will also provide an opportunity to importers in the informal sector to declare and clear imports at fixed rates.

“Smuggling will decline and revenue will rise through tax policy shift for the industry,” he added. “The fixation of tax rates at Rs3,000 on the import of laptops and desktop computers from 2015-16 will discourage traders from illegally importing computers.”

Iqbal said if provided an opportunity, the industry would share a detailed analysis for tax managers and budget-makers to help them enhance revenue and broaden the documentation of computer vendors across the country.

He said according to some estimates, around 420,000 laptops were being imported annually and only 35% of these were brought legally. Annual revenue collection from the 147,000 laptops imported under the legal cover does not exceed Rs1.146 billion.

Similarly, if the government charges the fixed tax of Rs3,000 on desktop computers, with a market capacity of 600,000 annually, it could get a huge amount in the tax net, he added. 

Published in The Express Tribune, May 27^th,  2015.

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