KCCI President demands reduction in Sales Tax on Mobile Phones

KARACHI: President of the Karachi Chamber of Commerce & Industry (KCCI) Shamim Ahmed Firpo has requested Federal Minister for Finance Ishaq Dar to reduce Sales Tax on Feature Phones (Category-A) to Rs150 per phone which has been raised to Rs650 in Federal Budget 2017-18 as compared to Rs300 of Federal Budget 2016-17.

He further asked the Finance Minister that Sales Tax imposed on all three categories of mobile phones should be restored to the same level where it was in Federal Budget 2016-17.

In a letter to Finance Minister, President KCCI said that a delegation comprising importers and wholesalers of Mobile Phones which was led by Former President Karachi Electronic Dealers Association (KEDA) Muhammad Idrees expressed deep concern over the increase in 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 Sales Tax on Mobile Phone (Feature Category), which is comparatively a basic and cheaper phone, has been raised from Rs300 to Rs650 per phone along with an additional Regulatory Duty of Rs250, which means that the total taxes and duties have been raised by around 112 percent on an imported phone of Rs800 only which is a sheer injustice not only to the concerned traders but also to the poor and down trodden 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 will also result in loss of revenue to the national exchequer, he added.

He hoped that keeping in view the hardships being faced by concerned traders, the government will pay attention to this serious issue by restoring 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 Rs150 per phone.