Smartphone tax and PTA justified
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One of the first things people ask when purchasing a smartphone these days is, ‘Is this PTA or Non-PTA’? The taxation on flagship smartphones has really put people into second thoughts on whether the investment is worthwhile or not. If we look at early 2021 and slightly before, the PTA tax on smartphones was not as high as it is now. The tax amount to unlock an iPhone 7+ (256GB) variant was around Rs.7,000/-. However, entering the last quarter of 2021 or first half of 2022, that tax amount increased to Rs.36,000/-.

If there was more than five times of an increase on iPhone 7+, people could only imagine what it was on the upcoming flagship phones. Now, in 2024, you will have to pay more than 3 lac in tax alone if you intend to purchase a PTA-approved iPhone 16. The phone itself is not any less, either, but stacking on the tax just puts it above the budget range.

Smartphones and paying high PTA taxes on them
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Is the Tax Amount Justified?

Now, a person is left wondering if the purchase of a flagship smartphone really is worth the investment. However, it is not just on flagship phones that the tax is high, it can be seen specifically on phones that are imported. These include Apple, Samsung and Google Pixel phones. The products that are made and sold here, you might not see any tax on them. But, when it comes to these brands, the tax shoots sky high.

One can argue that the import tax is high because of the purchases that many people have been making, and less local purchases. However, there needs to be some incentive on local products too, if they want people to purchase locally assembled phones. Either that, or the authorities in charge can come up with some reduction on smartphone taxes, alongside some incentives for purchasing local.

smartphones and the high import duty on them
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Adjusting The PTA Tax

Of course, the tax on local seems alright, but we do believe that there has to be some relaxation on the import PTA tax that is used to unlock the phone. Due to the high taxes, a lot of people carry around two phones, one PTA and one non-PTA. This also increases the risk of mugging.

If not a tax reduction, then there ought to be schemes in place that let these international brands establish themselves in Pakistan, diversifying the Pakistani tech market. There are quite a few ways to go about this and they ought to be explored.

Stay tuned for more from Brandsynario!