The withdrawal of regulatory duty exemption on cellphone manufacturing in the federal budget for 2020-21 will create hurdles in the local manufacturing of mobile phones in the country.
Due to high tariffs in the US on Chinese goods, Chinese phone companies relocated some of there units to India, Vietnam, Indonesia, and Bangladesh. Pakistan can also benefit from this opportunity and attract investment in mobile manufacturing plants.
But the recent step taken by the government that has removed an important incentive in the budget can destroy its plans to appeal to the mobile manufacturers from around the world for establishing their phone plants in Pakistan.
The Economic Coordination Committee (ECC) has given the approval to remove the on “completely knocked down (CKD) kits and completely built units (CBUs) manufacturing by Pakistan Telecommunication Authority (PTA)-approved manufacturers under the Input-Output Co-Efficient Organisation (IOCO)-authorised imports.”
It was an important proposal in the first mobile device manufacturing policy of Pakistan. Later, on June 2nd, 2020 it was approved by the cabinet in a meeting. But in the Finance Bill this incentive was not included.
Finance bill needed a change via a Statutory Regulatory Order (SRO) or supplementary finance bill to add this sentence – “imported by mobile phone manufacturers/assemblers certified by PTA under IOCO-approved import authorization”.