Mobile Phone Imports on The Rise as Trade Deficit Worsens

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The caretaker government is mulling over policy guidelines to reduce the import bill by rationalizing import of mobile phones and other telecom apparatus, sources revealed.

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Pakistan’s trade deficit reached an all-time high of $33.88 billion during the first eleven months of the current fiscal year with $55.23 billion imports and $21.34 billion exports.

The Commerce Division has reportedly started preparing a list of non-essential items and the government is considering measures to rationalize non-essential imports to reduce the quantum of trade deficit.

Import of mobile handsets and other telecom apparatus witnessed a considerable increase during the recent months and the government may take measures to rationalize its import, sources added.

Mobile phone import witnessed a phenomenal growth of 18.56 percent in the first ten months (July-April) of 2017-18 and remained at $678.6 million compared to $572.38 million during the same period of 2016-17 (July-April).

Mobile phone imports in April 2018 were $75.532 million, increasing by 57.56 percent compared to $47.938 million imports in April 2017.

Overall telecom imports saw an increase of over 11.91 percent during July-April 2017-18 compared to the same period of last year. Total imports were recorded at $1.266 billion during this period compared to $1.131 billion in July-April 2016-17.

Telecom imports remained at $134.117 million in April 2018 and registered a 30.16 percent growth as compared to $103.038 million during April 2017.

Other telecom apparatus import also witnessed a growth of over 5.11 percent in July-April 2017-18 as it stood at $587.584 million against $559.019 million during the same period of last year.

Sources said that to curtail growing imports and generate additional revenue, the federal government has announced a new kind of levy of up to Rs. 5,000 on importing mobile phone handsets in the budget for 2018-19.

According to the Finance Act 2018, there shall be a mobile handset levy at the rates specified on smartphones of different categories.

The levy will be zero where import value of the handset (including duties and taxes) does not exceed Rs. 10,000. There will be a levy of Rs. 1,000 per set where import value of handset (including duties and taxes) exceeds Rs. 10,000 but does not exceed Rs. 40,000. There will be a levy of Rs. 3,000 where import value of handset (including duties and taxes) exceeds Rs. 40,000 but does not exceed Rs. 80,000. There will be a levy of Rs. 5,000 where import value of handset (including duties and taxes) exceeds Rs. 80,000 per set.

According to the Finance Act, a levy of Regulatory Duty (RD) @ Rs. 175/set on completely knocked down (CKD)/semi-knocked-down (SKD) kits of mobile phone have been imposed.

However, according to experts, this may result in an increase in mobile phone handsets prices and will encourage the smuggling of mobile phones.

PTA DIRBS

Pakistan Telecommunication Authority (PTA) has launched a “Mobile Devices Identification, Registration and Blocking Regulations System” (DIRBS) to ensure that stolen and blocked phones, as well as phones with no duplicate or non-standard identifiers, are blocked from use in the country.

PTA has established DIRBS to prevent non-compliant mobile devices from being imported, sold, marketed or connected with the mobile operators’ networks. The move has been taken in order to protect mobile phone users’ data across the country.

It will further ensure that mobile licensees actively identify such phones on their networks and maintain and update an industry-wide database with information about such phones for the benefit of the mobile services sector worldwide.

PTA prescribes standard operating procedures for its implementation on technical, management and operational matters. Stolen phones, blocked phones, and phones with duplicate or non-standard identifiers shall be blocked by mobile network operators from the use in Pakistan.

Originally Published on ProPakistani.com

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