Pakistan Telecommunication Authority (PTA) has granted permission to Lucky Motor Corporation Limited (LMCL) to manufacture Samsung mobile devices in Pakistan which is likely to reduce the prices of company’s products by Rs 9,000.
The manufacturing plant by Samsung will be set up in Karachi.
In the budget 2021-2020, the PTI-led government had waived taxes on the manufacturing of cellphones to encourage local production.
After this decision, different mobile companies are making efforts to set up their manufacturing plants in Pakistan besides some which have already established them.
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PTA has so far allowed 25 foreign and local companies to manufacture mobile devices locally.
The made-in-Pakistan products will also be exported and the new industry will create job opportunities.
According to the government policy, an imported mobile is covered under customs duty.
However, there is no kind of tax if only a few components of it are imported and assembling is done in Pakistan.
Pakistan is a large importer of mobile phones as the quality of the devices manufactured locally does not cater to the requirement.
Similarly, imported mobile phones ranging between $100to $350 have a tax equivalent to Rs 970 however there will be a complete waiver in case of local production.
The tax on local manufacture of cellphones ranging between $350 to $500 is Rs 3,000 while it will surge to Rs 5,000 if some components are imported and it is assembled in Pakistan.
For mobile phones ranging over $500, the tax will be Rs 5,200 in case of complete local production while it will increase to over Rs 11,000 if it is just assembled after components are imported.
Most of the mobile phones manufactured by Samsung fall in the price range between $250 and $500 and manufacturing them in Pakistan would save the company around Rs 9,000 on each set.
According to PTA, there are over 100 million people who use smartphones which is a giant market for Samsung.
As per PTA, Pakistan has total broadband subscribers of 103mn (penetration of 47%) and cellular subscribers of 184mn (teledensity of 84%). Broadband subscribers & cellular subscribers have grown at a 6-Year CAGR of 35% & 8% respectively #Telecom #Mobile #Pakistan #Broadband pic.twitter.com/7syysikhEo
— Topline Securities (@toplinesec) August 10, 2021