Wishing About That New Phone? Bad News! Government Increased Tax On It

Government increased tax on mobile phone and duty on Mobile Phones
Courtesy: NetMag Pakistan

A couple of days ago, the news started gaining momentum that was related to the increasing duty and taxes on the mobile phones. The issue regarding the increasing taxes was already prevailing all around Pakistan and this was another aspect that came out to the front. As a result of that, a lot of people have started speculating the new government but let’s not talk about that and come straight to the point. Government increased tax on mobile phone and duty on Mobile Phones for promoting local brands rather than depending on the exports!

Government increased tax on mobile phone and duty on Mobile Phones
Courtesy: iWitness News

There are so many people in Pakistan affected by it because of the increasing use of the mobile phones and this tax rule applies to the phone sets that are worth 60$ or above. Also, it is estimated to collect 4.4 billion rupees from this measure in the year 2018 till 2019.

New Taxation Values

Government increased tax on mobile phone and duty on mobile phones and provided this new taxation slabs that have been implemented:

  • Rs 250 will be applied on every phone worth less than 60$
  • 10% regulatory duty (RD) for the phones that are relatively expensive
  • 20% RD on the phones that are more expensive.

These are some of the policies that have been put forward in the Finance Supplementary (Amendment) Bill however, it has not been finalized yet by the Finance Ministry.

Application Of The RD On The Luxury And Non-Essential Items

There have been an increasing demand of the Pakistani citizens on importing luxury as well as the non-essential items. Therefore, the increase in tax is carried out to discourage the imports and rather to be more focused on buying the local products.

One of the main reasons behind emphasizing on this point of increased tax on mobile phone and duty on mobile phones is to control trade imbalance.

Government increased tax on mobile phone and duty on Mobile Phones
Courtesy: Bad Credit Loans

Furthermore, the tax has been raised for some of the business products such as mobile phones, automobiles and tobacco while on the contrary, it has been reduced from some of the other business stakeholders.

Why The Sudden Increase In Tax?

There are various facilitating factors that have led the government to take action against the taxation and increase it. For a case in point, there is an evident lack of equilibrium in the trading besides the competitiveness of the domestic manufacturing sector. As a result of that, the rich and poor shall both be treated equally by means of introducing the fairness in fiscal measures. Government increased tax on mobile phone and duty on mobile phones to cater this issue of trade imbalance.

Government increased tax on mobile phone and duty on Mobile Phones
Courtesy: The Express Tribune

It Can Be The Way Forward!

Government increased tax on mobile phone and duty on mobile phone is a big news and a step forward to implement strategies that are designed to increase the taxation essentially rest on the verdict that there needs to be an equal treatment of the people within Pakistan. It has led to the increase in taxes with the ultimate aim of bringing the financial stability in the country and deal with the financial objectives side by side.

The fiscal unit that has been set out and that needs to be paid by the poor and rich, will be equal. For instance, if there is someone who buys a cheaper mobile phone, would have to pay the tax depending on its worth and vice versa. It will bring in beneficial outcomes in the long run. Not only will it reduce the use of importing the items from abroad but in addition to that, it will also bring back the focus towards buying the local products. What are your thoughts about it? Leave your perspective about the matter in the comments section below.