Cutting PTA taxes or Stopping Mobile Phone Smuggling – Which one is a better approach?

Pakistan has been witnessing a steep increase in mobile phone smuggling owing to rising import taxes and foreign exchange rates. Now, the government is planning to initiate a crackdown on mobile phone smugglers. However, one could argue that the government should consider lowering taxes on mobile phones instead of solely focusing on taking action against smugglers. Lowering the exorbitant taxes on mobile phones may solve the root cause of smuggling by making legal imports more affordable and reducing the incentive for illegal practices. Here are some attributes supporting this perspective:

Affordability for Consumers:

High taxes on mobile phones contribute to the increased cost of legal imports, making smartphones more expensive for customers. Therefore, through a reduction in mobile phone taxes, the government can make mobile phones more affordable, benefiting consumers and promoting the legal import market.

Encouraging Compliance:

A more reasonable tax structure could encourage businesses and customers to comply with legal procedures. This would reduce the reliance on illegal methods such as CPID approval services and IMEI repair.

Competitive Market:

A reduction in taxes could lead to a more competitive market, promoting healthy competition among legal importers and retailers. This competition could lead to innovation, improvement of services, and an overall benefit for consumers.

Also read:

Dubai Emerges as the Most Used Route for mobile smuggling in Pakistan