IT products smuggling damaging fair competition, causes tax losses


STAFF REPORT ISB: Smuggling of IT products and irrational taxes on them are hurting the competition in local market thus resulting in multibillion rupees losses to the national exchequer.


IT traders said the Pakistan Computer Association (PCA) has floated a number of proposals to the government for stopping smuggling of IT products and rationalisation of duties.


According to the, if implemented, the recommendations will document the sector, stop smuggling, provide a level-playing field to the legal businesses as well as boost the sectors tax contribution to Rs5.37 billion a year from the existing less than Rs1.5 billion, they added. Fresh statistics reveal that cross-border smuggling of IT products and other electronic goods are around $12 billion a year, putting the documented computer industry at a disadvantageous position as compared to illegal importers.


“We are asking the government to take actions against the smuggling of IT products and bring this sector in a legal ambit,” an office bearer of PCA said.


Another proposal calls for review of the fixed valuation to define the duty and taxes on import of computer IT equipment to discourage smuggling and to facilitate legal imports. The computer imports bear one percent customs duty, 17 percent sales tax, six percent income tax and three percent additional sales tax.

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