The government has not implemented a majorly approved recommendation of Mobile Device Manufacturing Policy of removal of fixed Sales Tax on CKD/SKD manufacturing of mobile devices above USD 200 category.

This was revealed by the Ministry of Industries and Production in a written response to the National Assembly.

Replying to a question that whether the government has implemented all approved proposals mobile device manufacturing policy, the Ministry responded that all approved recommendations regarding Mobile Device Manufacturing Policy have been implemented except the removal of fixed Sales Tax on CKD/SKD manufacturing of mobile devices above the USD 200 category.

The Ministry further stated that this Division forwarded the above non-implementation at (a) vide summary on 4th December 2020 to ECC which in Case No. ECC-452/ 61/ 2020 dated 16-12-2020 approved, in principle, the said proposal at 2b of the summary i.e. removal of sales tax on locally manufactured phones of value more than “USD 200” with the direction that modalities shall be finalized by the Ministry of Industries and Production in consultation with Finance Division, Federal Board of Revenue (FBR) and relevant stakeholders.

However, due to the legal framework, instead of implementing above on CKD/SKD, FBR has maintained the gap between CBU and duty in flat rates for six different slabs according to the import value of the cellphones vide FBR SRO 840(I)/2021 dated June 30, 2021, thus encouraging local mobile phone manufacturing.

The National Assembly was further informed that so far Pakistan Telecommunication Authority (PTA) has issued manufacturing licenses to 26 companies.

Source: Pro Pakistani