Budget 2019-20: Govt decreases VAT on mobile phone imports by 3 percent

The government is giving relief to mobile phone retailers by slashing the Value-Added Tax from mobile phone imports by 3%. After the introduction of stringent policies of controlling the flow of imported phones throughout the country, this deduction will allow importers to gain more revenue off the imported devices.

In the last 10 months, we have seen almost a 7% decline in mobile phone imports primarily due to the latest policies of the government which require all phones to be registered within a specific time plus a passenger is only allowed to bring one extra unregistered cellphone when returning to the country. The All Pakistan Mobile Phone Dealers Association (APMPDA) have been against this rule since the start and they have reiterated that it is negatively impacting the business of mobile phone dealers throughout the country. The association also promised the government around Rs50 billion of revenue if they allow the import of used mobile phones from specific regions of the world.

Due to the decrease in VAT, we should be able to see some lower prices for mobile phones whose prices are currently skyrocketing due to the fluctuating dollar rate. Aside from relief in taxation, the Government is also maintaining the same GST on all products at 17%. With an overall development budget set a whopping Rs. 950 billion for the federal government, we will see highest ever spend of Rs. 43 billion on the Science and Technology sector this year.

Do you think excluding the VAT will decrease the prices of mobiles throughout the country?