See-saw: Tax relief traded off with new tax
The government has imposed Rs250 tax on IMEI activation.
Mobile service providers have been asked to collect this tax when a user puts his SIM in his newly-bought mobile phone. PHOTO: FILE
KARACHI:
Government has nullified a little relief of taxes to customers through introducing new tax on handsets.
The government has imposed Rs250 tax on international mobile equipment identification (IMEI) activation. This is in addition to Rs500 custom duty the government levied on the purchase of new mobile phones last year.
Usually found behind the battery, IMEI is a unique number that identifies handsets. Mobile service providers have been asked to collect this tax when a user puts his SIM in his newly-bought mobile phone.
If this collection was done from a retail channel, even then it would require a lot of process management, which is a direct cost to business, said an official. “To manage this, a significant investment will be required to create and maintain a database that will result in higher capital and operational expenditures – a direct hit on industry’s margins,” he said.
Telenor Pakistan’s Chief Corporate Affairs and Security Officer Muhammad Aslam Hayat said the responsibility of sales tax collection on handsets should be with its sellers.
“Enforcement of this tax at the cellular mobile operator level would definitely result in negative growth of the telecommunications sector,” concluded Hayat.
Published in The Express Tribune, June 6th, 2014.
Government has nullified a little relief of taxes to customers through introducing new tax on handsets.
The government has imposed Rs250 tax on international mobile equipment identification (IMEI) activation. This is in addition to Rs500 custom duty the government levied on the purchase of new mobile phones last year.
Usually found behind the battery, IMEI is a unique number that identifies handsets. Mobile service providers have been asked to collect this tax when a user puts his SIM in his newly-bought mobile phone.
If this collection was done from a retail channel, even then it would require a lot of process management, which is a direct cost to business, said an official. “To manage this, a significant investment will be required to create and maintain a database that will result in higher capital and operational expenditures – a direct hit on industry’s margins,” he said.
Telenor Pakistan’s Chief Corporate Affairs and Security Officer Muhammad Aslam Hayat said the responsibility of sales tax collection on handsets should be with its sellers.
“Enforcement of this tax at the cellular mobile operator level would definitely result in negative growth of the telecommunications sector,” concluded Hayat.
Published in The Express Tribune, June 6th, 2014.