Pakistan consumes one million computers annually

The levy of 15 percent general sales tax on import of branded computers unlikely to yield desired results in the backdrop of increasing smuggling of computers and laptops from Dubai.
Pakistan has a potential consumption of one million computers and laptops annually out of which about 150,000 are imported through legal channel, the Country Sales Manager, Acer Pakistan, Zahid Mahmood, informed the Business Recorder on Friday.
He claimed that most of the passengers while returning from Dubai bring four-five laptops in their bags and easily skip the airport in connivance of Customs staff. He asked the Federal Board of Revenue authorities to review the income generated out of general sales tax imposed on the import of computers/laptop.
Mahmood said the levy of general sales tax has discouraged the honest businessmen whereas it encourages the smuggling activities. The ratio of taxation including Customs Duty, Withholding Tax etc was not more than 11 percent in 2006, that helped reduce laptop prices from Rs 60,000 to Rs 40,000 in the country.
After the imposition of general sales tax, the prices have increased up to Rs 48,000. It is interesting to note that customers don't want general sales tax invoice and ask the shopkeeper/dealer to issue a 'Katchi receipt' instead, without general sales tax despite the fact that they have to pay only Rs 41,000 in the market, he maintained.
He stressed for providing level playing field to the local brands as well as foreign brand and the government must reduce general sales tax from 15 percent to 5 percent and impose it across the board which would generate more revenue to the national exchequer.
He further explained that the foreign investors are reluctant to come to Pakistan due to discriminatory attitude of government functionaries. The Country manager also said that 70 percent of refurbished or used computers are sold in Pakistan while 15 percent of the need is catered by local and foreign brands.
Despite government's facilities, only two out of over a dozen of local manufacturers/assemblers could survive while rest of them has wrapped up their business. "The government wants to promote the IT industry but lacks of co-ordination between the department and ministries concerned.
Prior to the levy of any tax on IT relation equipment, the government must co-ordinate with the stakeholders including manufactures and dealers, the Higher Education Commission, the Ministry of Information Technology, the Federal Board of Revenue, the Ministry of Commerce and Board of Investment. A unanimous decision should be taken in this regard bolster the IT industry.