Will Budgetary Tax Exemptions Lead to a Reduction in Mobile Prices?

The federal government of Pakistan announced the national budget for the fiscal year 2023-24 with the goal of uplifting the economy. Again, they neglected the mobile industry which has huge potential and can contribute significantly to the national exports. Experts from the local mobile manufacturing industry were hoping for the opening of LCs without any quota and were also seeking a tax exemption on mobile parts imports. However, the government didn’t give any concessions to the mobile industry except for not imposing any new taxes. Therefore, unfortunately, there will be no reduction in mobile prices for the users. As per some credible sources, the tax exemption given by the government for IT-enabled services doesn’t include mobile phone parts.

Government not giving importance to Mobile Industry:

The apparent lack of attention given to the mobile industry in the national budget raises concerns about the government’s recognition of its potential and contribution to the economy. This oversight is particularly notable when comparing Pakistan’s approach to that of other countries, such as India and Vietnam, which have successfully leveraged their mobile industries to drive economic growth.

India & Vietnam as a Role Model in Mobile Export Growth:

India serves as a prime example of how a focused approach to the mobile industry can yield substantial benefits. The government of India implemented various initiatives to promote domestic mobile manufacturing, including the “Make in India” campaign. This initiative aimed to attract foreign investment and facilitate local production of mobile devices and components. India made around INR 85,000 crores through mobile phone imports.

Similarly, Vietnam has also experienced remarkable success in the mobile industry. The Vietnamese government recognized the sector’s potential early on and implemented policies to attract investment and foster growth. They established specialized industrial zones and provided infrastructure support to attract multinational mobile companies. Moreover, favorable tax incentives and streamlined procedures facilitated the establishment of mobile manufacturing facilities in the country.

These examples demonstrate that when governments prioritize and support the mobile industry through tailored policies, it can lead to transformative economic outcomes. By providing tax incentives, easing import regulations, and offering infrastructure support, countries like India and Vietnam have successfully attracted investment, created jobs, and stimulated economic growth.

Opportunity for Pakistan:

Pakistan has an enormous cheap workforce which in the right direction can really boost the mobile industry. Therefore, the government should follow the model of India & Vietnam and make conducive policies that can help in boosting the mobile industry. Ultimately, it can have a significant positive impact on the overall exports of the country.

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