Islamabad: The federal cabinet has approved the country’s first Mobile Device Manufacturing Policy (MDMP), according to a news report. This policy will pave the way for local manufacturing and assembly of mobile phones in Pakistan. The cabinet gave its go-ahead following the approval of the Economic Coordination Committee (ECC).
The Engineer Development Board (EDB), part of the Ministry of Industries and Production, prepared the draft policy to promote mobile phone manufacturing in Pakistan as part of the Electronic Products Manufacturing Initiative (EPMI). The ECC approved this policy last month.
Reportedly, the local mobile manufacturing market has the potential to produce 40 million units. This became possible after the successful launch of the Device Identification, Registration and Blocking System (DIRBS).
As part of the policy, the government will remove regulatory duty for completely knocked down (CKD) and semi-knocked down (SKD) manufacturing by manufacturers the Pakistan Telecommunication Authority (PTA) has approved under the Input/Output Co-Efficient Organisation (IOCO).
With this policy, the government will also remove the fixed income tax on CKD/SKD mobile device manufacturing of devices worth over USD 350. However, it increased the fixed income tax on the USD 351-500 category by PKR 2,000 and on the USD 500 category by PKR 6,300. This policy will also allocate a research and development allowance of 3% to local manufacturers for mobile device exports. It will also exempt locally assembled or manufactured phones from the 4% withholding tax on domestic sales.
The government will also maintain a tariff differential between Completely Built Units (CBUs) and CKDs/SKDs till this policy expires.
Currently, a total of 16 local companies are manufacturing mobile phones in Pakistan, primarily focusing on feature phones. However, they are now evolving their techniques according to the latest technologies. Commenting on this approval, Minister for Industries and Production Hammad Azhar congratulated his ministry and appreciated the support from the Ministry of Commerce, Ministry of Information Technology and Telecom, Ministry of Planning, the Federal Board of Revenue (FBR), and the ECC.
