Mobile phone handsets, telecom apparatus: Government mulling taking steps to rationalize import

The caretaker government is considering measures to reduce import bill by rationalizing import of mobile phone handsets and other telecom apparatus, sources revealed to Business Recorder. Pakistan's trade deficit reached an all time high of $33.88 billion during the first eleven months of the current fiscal year with $55.23 billion imports and $21.34 billion exports.
Commerce Division has reportedly started preparing a list of non-essential items and the government is considering measures to rationalize non-essential imports to reduce the quantum of trade deficit. Import of mobile hand sets and other telecom apparatus witnessed considerable increase during recent months and the government may take measures to rationalize its import, the sources added.
Mobile phone imports witnessed a phenomenal growth of 18.56 percent in the first ten months (July-April) of 2017-18 valued at $678.6 million compared to $572.38 million during the same period of 2016-17 (July-April). Mobile phone imports in April 2018 were $75.532 million and increased by 57.56 percent compared to $47.938 million imports in April 2017.
Overall telecom imports saw an increase of over 11.91 percent during July-April 2017-18 compared to the same period of last year. Total imports were recorded at $1.266 billion during this period compared to $1.131 billion in July-April 2016-17. Telecom import was $134.117 million in April 2018 and registered 30.16 percent growth compared to $ 103.038 million during April 2017.
Other telecom apparatus imports also witnessed growth of over 5.11 percent in July-April 2017-18 and stood at $587.584 million against $559.019 million during the same period of last year. Sources said that to curtail growing imports and generate additional revenue, the federal government has announced a new kind of levy of up to Rs 5000 on importing mobile phone handsets in the budget for 2018-19.
According to the Finance Act 2018, a mobile handset levy will be zero where import value of handset (including duties and taxes) does not exceed Rs 10,000; a levy of Rs 1000 per set where import value of handset (including duties and taxes) exceeds Rs 10,000 but does not exceed Rs 40, 000; and Rs 3000 where import value of handset (including duties and taxes) exceeds Rs 40,000 but does not exceed Rs 80,000. There will be a levy of Rs 5000 where import value of handset (including duties and taxes) exceeds Rs 80,000 per set.
According to the Finance Act 2018, a levy of Regulatory Duty (RD) @ Rs 175/set on completely knocked down (CKD)/ semi-knocked-down (SKD) kits of mobile phone has been imposed. This will result in increase in mobile phone handset prices as well as encourage smuggling of mobile phones.
Pakistan Telecommunication Authority (PTA) has launched "Mobile Devices Identification, Registration and Blocking Regulations System (DIRBS) to ensure that stolen and blocked phones as well as phones with no duplicate or non-standard identifiers are blocked from use in the country. The PTA has established a DIRBS to ensure that non-compliant mobile devices are not imported, sold, marketed or connected with the mobile operators' networks. The move has been taken in order to protect mobile phone users' data across the country.
It will further ensure that mobile licensees actively identify such phones on their networks and maintain and update industry-wide database with information about such phones for the benefit of the mobile services sector worldwide. The PTA has established DIRBS and prescribes standard operating procedures (SOPs) for its implementation on technical, management and operational matters. Stolen phones, blocked phones, and phones with duplicate or non-standard identifiers shall be blocked by mobile network operator (MNO) from the use in Pakistan.