Three mobile phone companies including Airlink, Vivo, and Advance Telecom are to establish their manufacturing plants in Pakistan. The decision was made after government announced 4% tax exemption for manufacturing the mobile phones.
Reportedly, Pakistani government put an end to withholding tax over locally manufactured mobile phones. The step was taken to enhance the assembly and production of mobile phones within the country.
Mobile phone companies’ incentive adored by investors
The move is adored by the investors because previously manufactured mobile phones cost higher than imported sets. The first-ever mobile device manufacturing policy would be beneficial for the economic prosperity of country. Cheap mobile phones from foreign countries were a great threat to the local phones. Therefore, this move would ease in eliminating the threat.
Chief Executive of Infinix and Techno, Amir Allahwala said, “Now after-tax relaxations, there is a difference of around Rs1,900 per $100 devise between a locally assembled phone and an imported set.”
Cities for the establishment of mobile phone manufacturing units
A senior official of the Engineering Development Board (EDB) confirmed that Vivo, Airlink, and Advance Telecom have applied for the establishment of phone manufacturing units in Pakistan.
The manufacturing unit for Vivo is set to be established in Faisalabad, that of Advance Telecom in Karachi and Airlink in Lahore.
Role of PTA in mobile manufacturing units
Pakistan Telecommunication Authority (PTA) would operate as a regulator and would supervise all the policies being implemented by the units. However, the Ministry of Industries and Production (MoIP) would act as a policymaking authority.
Additionally, PTA, the telecom sector regulator, has also issued Mobile Device Manufacturing Regulations 2021. According to PTA, land, finances and nationality of investors etc. come under the requirements for the establishment of mobile phone plants. But, EDB is of the view that these details are the concern of MoIP.
Market sources concluded that clashes between PTA and EDB may lead investors to face problems at the approval stage.