Vivo,Airlink and Advance Telecom mobile companies to establish mobile manufacturing plants in Pakistan,after the government incentivize the tax policy for the assembling and manufacturing mobile units in Pakistan.
Vivo plans to set up its unit in Faisalabad. Airlink has applied for a unit in Lahore; while Advance Telecom plans to establish one in Karachi.
As the government introduced tax incentives for the assembly / manufacture of mobile phones in the recent presidential decision, three new cell phone companies have expressed interest in setting up their factories in Pakistan.
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The government recently passed an executive order to abolish withholding tax on locally made cell phones. The move was taken to promote the assembly and manufacture of mobile phone parts in the country.
"Three newcomers have applied for the creation of manufacturing units in the country," said an official from the Engineering Development Board (EDB), an affiliated ministry of industry and production.
He said that EDB is the political secretariat for mobile device manufacturing in the country, adding that the tax benefits introduced in the regulation were originally proposed by EDB after reasonable consideration.
Meanwhile, investors have praised the government's move to do away with WHT, as imported kits were cheaper than locally assembled kits under the previous tax regime.
"Now, after tax breaks, there is a difference of about Rs 1,900 per $ 100 between a locally mounted phone and an imported device," said Amir Allahwala, general manager of a company that produces Infinix and Techno mobile devices.
According to market sources, new tax incentives and subsequent new entrants will ensure healthy competition in the market, even though the production / assembly of mobile phones has already started in the country.
The Ministry of Industry and Production, as the policy-making authority, would support the new entrants, while the Pakistan Telecommunications Authority (PTA), as regulator, would oversee the implementation of mobile phone manufacturing policies, she added.
Interestingly, the PTA recently issued its mobile device manufacturing rules for 2021, which include requirements for setting up a manufacturing / assembly facility "ownership, finance, investor nationality, etc."
However, EDB denied that details of the creation of a production unit were under the Ministry and not under the PTA. Market sources believe that in the event of confusion and clashes between EDB and PTA regarding cell phone regulations and policies during the approval process, investors may have issues.
