Heavy taxes cut cell phone sales

Traders say govt should revisit new levies on handsets

LAHORE: Following an exorbitant increase in the duty and taxes on mobiles phones and cases of illegal registration by stealing international travellers’ data, the sales of new and used mobile devices have slumped in markets across Punjab.

Traders at the biggest mobile phone market in Lahore, Hafeez Centre, told The Express Tribune that mobile phone sales have been dropping continuously following the Pakistan Tehreek-e-Insaf (PTI) government’s imposition of heavy duties and taxes on mobile handsets.



Muhammad Bilal, a trader, said it was not difficult for a shopkeeper to sell a dozen or so mobile phones in a day before the introduction of the Device Identification Registration and Blocking System (DIRBS) and new tax regime. However, a massive increase in duty and taxes on the mobile handsets has compromised consumers’ purchasing power.

“Earlier,” he highlighted, “if a consumer could not afford a new handset, he could find a good bargain in the used mobile market. However, thanks to cases of illegal mobile phone registration by stealing the data of international travellers have shaken consumer confidence in used devices. Now people are reluctant to buy used devices, badly hurting the business of small traders,” he maintained.

A citizen, Qaiser Hanif, said the PTI came into power with a promise of change, but it has failed to bring any positive change in the common man’s life. Prices of all commodities have multiplied.

Heavy duties and taxes have been imposed on mobile phone users and even on those expat Pakistanis who visit their homeland once a year.

Earlier, the government had allowed the import of one duty and tax-free mobile phone by international travellers or expat Pakistanis who earn billions of dollars worth of foreign exchange for Pakistan. Later, this facility was withdrawn on the pretext of data leaks of international travellers.

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“Instead of punishing the ‘thieves’ in their ranks, the government has imposed heavy taxes on expat Pakistanis,” Qaiser said.

Similar remarks were made by other shopkeepers and consumers who demanded the government revisit the duties and taxes on mobile phones.

In a recent meeting of the Senate Standing Committee, it was revealed that over 47,000 international travellers’ data had been misused for illegal registration of mobile phones through the DIRBS. Several FIA officials have been arrested for their involvement in data leaks and illegal mobile registration.

To curb illegal mobile phone registration, the government has withdrawn the baggage rule facility that allows international travellers to bring one mobile phone in tax-free. As per the Finance Bill 2019, the government has imposed duty and taxes of Rs370 to Rs36,720 per handset for the commercial importer and Rs300 to Rs31,520 for passengers under the baggage facility.

Published in The Express Tribune, July 17^th, 2019.