Smartphone assemblers may adjust tax impact in prices

BY: JIBRAN SARFARAZ

The proposed new taxes on smartphone will reflect on the prices of different brands at a retail level but the assemblers will prefer to adjust the impact, avoiding passing on the full impact to the consumers to make sure their affordability, this was stated by Asma Hayat, an official of the smartphone company, realme in a media briefing.

It is pertinent to mention here the government proposed 18pc sales tax on smartphone recently, which drew reaction from industry stakeholders and consumers’ rights associations. She mentioned out that tax revenues benefit to the economy in the long run hence assemblers believe in compliance of the regulations of the hosting country.

The local demand of the smartphone has been terrific since the resumption of the assembly at a local in the recent times however the market has been very competitive in Pakistan with number of players are producing smartphones at different price points and specification.

Asma further highlighted that smartphone market in Pakistan is expanding due to presence of a significant population of vibrant and tech-savvy youth therefore assemblers focusing their choices are the winners in the market.

Pakistan is now assembling almost all global brands of mobile phones locally, increasing the ‘Made in Pakistan’ production to 95% of the local demand, while the share of imported phones (finished products) has reduced to merely 5%. The local assembling plants assembled 13.08 million mobile handsets during the first five months (January-May) of the calendar year 2024 compared to 0.76 million imported commercially.

The domestic production is saving around 15-20% in foreign exchange, as local assemblers are still importing almost all mobile phone parts from foreign manufacturers.
There are nearly 20 global branded phones under significant setups in Pakistan. Many more companies are involved in local assembling.