Custom Duty increased by 5% on import of Telecom Equipment

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Custom duty on all the Telecom equipment imported has been doubled by the Government of Pakistan. The telecom machinery releated to 3G network will therefore see a sudden rise in price.

The duty has been imposed under the Federal Budget for 2014 – 15, on imported machinery from 5 percent to 10 percent.This increase of duty on telecom equipment will apply from July 1st, 2014.

The Statutory Regulatory Order 575(I)/2006 has also been nullified under the Finance Bill 2014-15, thus this facility of reduced duties on import of telecom equipment has also been with drawn.

According to a telecom expert the increase in duty on telecom equipment is increased to 10 percent and in some cases a duty of 15 to 25 percent will apply.

This increase will invariably affect when the major telecom operators in the country are busy in upgradation and employment of their 3G and 4G networks.

Last year the Telecom operators in Pakistan have reportedly paid Rs. 670 million (approximately) in customs duties.

The increase in custom duty on telecom equipment suggests that roughly this year the telecom operator in Pakistan have to pay around Rs. 968 million in tax.

The increase in custom duty will affect the finances and estimates of 3G employment plan of Telecom operators and they might have to reduce their employment of equipment across the country or it might effect their 3G network expansion plans.

Due to implications of hike in custom duty some telecom operators may not meet the deadline of 3G rollout placed by Pakistan Telecommunication Authority.

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