After recent relaxations from the government in withholding tax, three mobile firms named Vivo mobiles, Airlink and Advance Telecom have shown interest to establish mobile manufacturing units in Pakistan.
In an effort to encourage installation and eventually production of parts in the country, the government recently enacted an order dismantling WHT on locally manufactured mobile sets.
Investors praised the government’s step to outlaw the withholding tax on locally assembled sets.
Applications for the development of production units in the country have been submitted by three new entrants,’ said an official of the Engineering Development Board (EDB), an associated agency of the Ministry of Industries and Development. ‘Vivo intends to build its Faisalabad unit; Airlink has applied for a Lahore unit, while Advance Telecom intends to set up one in Karachi.’
Investors welcomed the change by the government, as imported sets were cheaper than those made under the previous regime. In this regard, the Chief Executive of a company making Infinix and Techno mobile sets, Amir Allahwala, said, “Now after tax relief, there is a difference of approximately PKR1,900 per set between a locally assembled mobile phone and an imported one with a valuable of $100”.
At the end of the second year of production/assembly, the suppliers must fulfill the requirements set by the Govt. The PTA strategy foresees that 2% of chargers and 1% of bluetooth hands-free devices of the overall assembled devices will be generated locally.
The quality and control testing of all integrated equipment and parts manufactured locally will be the responsibility of the PTA.