Govt. Considering to fix duties and taxes on the import of computer equipment.

ISLAMABAD ( BMZ REPORT )

Special Assistant to Prime Minister on Revenue Senator
Haroon Akhtar Khan has said that the government is actively considering a budget proposal of the computer industry to fix duties and taxes on the import of laptops to check the smuggling of computer equipment. Responding to a query at a pre-budget seminar held here on Saturday, he admitted that the industry is facing serious issue of smuggling of computer items in the country. It is a viable proposal to fix duties and taxes on the import of laptops to generate revenue and control smuggling through policy measures and tax rationalization. During budget exercise, the government is seriously considering the proposal of the computer industry, he added.

Meanwhile, Pakistan Computer Association (PCA) urges the government to accept its proposals for inclusion in the national budget 2016-2017.
Munawar Iqbal Chairman PCA said that the Federal Budget FY 2016-2017 is few days away and the IT sector has already sent and shared its proposals, on behalf of the IT business community and stakeholders in the country to the FBR, including Prime Minister’s Advisor on Revenue Haroon Akhtar Khan, the federal IT minister Anusha Rehman  and FPCCI with a view to get its proposals and  suggestion for inclusion in the national budget for the mutual benefit of the IT business community and the government, in terms
of growth of information technology and maximum  revenue generation to the government.   The proposals suggested by the PCA aims to bring healthy changes in the IT market to create a business friendly environment for IT sector in the country.  In its proposals, the PCA has asked the FBR to rationalize the tax structure and introduce measures to encourage a documented economy in the country which will not only pave way for broadening of tax base bringing in new tax payers, curb smuggling and Khepia mafia and help generate maximum revenue to the government under a
business friendly environment in the country.

The PCA has focused on the Laptops in the market which has the potential to generate maximum revenue to the government from the IT sector compared to other IT products with a low revenue generation capacity.  It is has suggested a fixed duty of Rs.3000/- on the laptop which are brought in the number of 600,000/- yearly in the country with 25% imported legally and 75% entering  the market through illegal channels. This deprives the government of a large chunk of the income due to the sprawling trend of smuggling of IT products. The PCA views the smuggling and Khepia responsible for low income generation to the FBR and therefore wants to
rationalize the tax structure. The PCA strongly believes that its
fixed-duty formula if implemented in totality will yield an expansive net amount of Rs.1.8 billion annually to the government. In other words, the government would be losing a net amount of Rs.1.3billion, if illegally imported laptops go unaccounted.

The total revenue loss to exchequer is Rs.1,350,000,000/- which can be harvested if the same laptops are imported on a fixed-tax formula, as proposed   in our above mentioned letter.
The PCA believes that its proposals will bring about following important changes in the IT sector:

1) Establishment of a documented economy, a market, free of distortion;

2)Broadening of tax net with increased taxpayers;

3) Encourage business transaction through the scheduled banks;
4) Curbing of smuggled IT products in the market; with buyers benefiting from the  documented economy;

5) Creation of a smooth and business-friendly environment; 6)Yielding greater revenue to the government;

7) Give wide-ranging benefit to the under-privileged class
including the youths and students in particular.

The growth of the information technology has been an important agenda of the present government which wants to give the benefit of IT growth to the common man and wants to make it accessible to the household people. The PCA urges the government to accept its proposals in letter and spirit in the interest of the growth of IT business and business community in the country, Chairman PCA added.