They were extremely high to start with. But still, a good thing. Sri Lanka should be careful we don’t take over Pakistan’s position as the most taxed ICT sector.
The breaks will see the withholding tax on mobile services drop from 14% to 12.5%, while federal excise duty will fall from 18.5% to 17%. With the federal government reducing the sales tax on mobile services, provincial governments are expected to follow suit.
Mid-range smartphones meanwhile will see custom duties slashed from PKR1,000 ($9.45) to PKR650. However, feature phones will see their duty rise to PKR650 from PKR300 with the convergence of the low-end and mid-range handset categories. High-end smartphones will retain their PKR1,500 duty.
In addition, the government is scrapping the withholding tax on transactions made via mobile payments services as a means of promoting the country’s fledgling digital payments sector.