Tax Relaxations Increases Import Of Telecom Equipment By 50% In Pakistan

The import of telecom equipment has seen quite a rise due to an increased demand for the services. Now almost every network in Pakistan is offering 3G/4G services for the customers.

As tax incentives were given in Budget 2017-18, therefore, it was easier for companies to import tech equipment. Currently, the import of telecommunication tools increased by 50%.

Tax facilities and rise in demand of 4G technology offers are the main reasons of increase in import.

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In July 2017 Pakistan imported tech gears worth $114.01 million which is 54% more than $74.26 million import in July 2016.

Custom duty tax was reduced by the government from Rs1000 to Rs650 per set, moreover, income tax was also minimized from 14% to 12.5% and excise duty on calls reduced from 18.5% to17%.

Also the fact that around 60% of smartphones are smuggled in the country, these incentives have reduced the illegal business.

As we said earlier that telecom companies are upgrading to 3G and 4G networks, recently Jazz was the company to acquire a 4G license. The first company that started 4G services in Pakistan was Zong. Then Telenor received a 4G license and Ufone CEO has also made an announcement that the company is completely turning its Lahore network to 3G technology.

As the CEO said, “Some of the operators may be importing the equipment to upgrade and expand their networks under the PTA (Pakistan Telecommunication Authority) Rollout Obligations while others may be doing it to meet consumer demand.”

Phone operators are investing via two strategies front loaded and rear loaded. In front loaded all investments are made as the fiscal year starts.  As for in the rear loaded the operators are bound to invest in the middle or towards the end of the year.

Pakistan is gradually turning in to the digitalized nation. IT and telecom sector are booming and further investments are being made to boost the economic activities in the country. The statistics show that import of telecom equipment last year was $28.05 million in July, which in July 2017 the imports have surged by 62% to $45.44 million.