Why Mobile Users Aren’t Willing to Pay PTA Taxes? A Case Study

(MANEND NEWS): Mobile users in Pakistan are getting agitated by the PTA taxes that are piling up with the passage of time. We believe that our national telecom regulator Pakistan Telecommunication Authority along with FBR is taking the wrong approach to impose such hefty taxes, especially on people who purchase phones for personal use. And guess what? It isn’t even benefitting the national exchequer and we will support our argument with a few stats and figures.

According to a reliable source, FBR collected around PKR 80 Billion in taxes during the year 2021-22. At that time, the taxes were low and the highest taxes were around PKR 45k which were certainly payable. On the other hand, the highest taxes now amount to PKR 180k on certain smartphones which is exorbitant. But, there is a catch! Despite the imposition of such hefty taxes, FBR managed to collect only PKR 5 billion in the first 5 months of 2023. Now, you must be thinking why this decline in tax collection was reported. Well, here are some reasons that will give you a more clear picture.

Reasons for Low Tax Collection
Insane Amount of taxes:

The first and foremost reason is the insane taxes that FBR had started to impose since last year. If you want to import an iPhone 14 Pro or Pro Max for personal use, you have to pay around PKR 180k to register it with PTA. This iPhone already costs more than $1000 and includes GST along with other value-added taxes. So, after paying this overall price, you import it into Pakistan and then have to pay another exorbitant tax. It is certainly unfair to the end user. Simultaneously, you will have to pay the same amount of taxes on all smartphones (Samsung S23 Ultra, Pixel 7 Pro, etc.) costing $1000 or more.

Old Phones have More Taxes than their Retail Price:

Can you even imagine that a 6-year-old iPhone has more tax than its purchase price? For instance, if you want to import an iPhone 8 that was launched around six years ago, you will have to pay around PKR 70k to register it with PTA. It is shocking as the retail price of the iPhone 8 is just around $100. Simultaneously, you have to pay around PKR 100k to register an iPhone X with PTA which costs around $120-$150.

Harsh Conditions and Economic Uncertainty:

It is evident that Pakistan is going through a pretty hard time because of the debt crisis, depreciation of the rupee, meager foreign exchange reserves along with a number of other factors. The inflation rate has reached unprecedented levels. So, in these conditions, can you even think that most people would be even willing to pay such hefty taxes? Instead, they are going for alternate solutions. Some are purchasing feature phones to use their sim cards, while others are using patched phones.