Draft prepared for local production of mobile phones in Pakistan

Draft prepared for local production of mobile phones in Pakistan

ISLAMABAD: Pakistan Telecommunications Authority (PTA) has introduced a draft 'Mobile Device Manufacturing Regulations and Authorization' to promote local manufacture of handsets.

The rules, drafted in the light of the Mobile Device Manufacturing (MDM) policy introduced by the government on June 2 this year, aim to appreciate the local production of the low, medium, and high-end smartphones.

Under the new licensing, foreign companies will be encouraged to invest in the manufacture of mobile handsets in Pakistan, while all stakeholders can submit their views and responses by October 5, 2020.

The PTA said that the permission would come into force from the date of its issuance and would be valid in Pakistan only for 10 years, adding that the rules would not apply to Azad Jammu and Kashmir and Gilgit-Baltistan.

The draft states that a permit allows a manufacturer to manufacture only one particular mobile brand, manufacturing the plant is allowed to manufacture mobile device models only for a specific brand, and multiple brand cases involving different manufacturers. I will have a separate manufacturing facility and permission.

Also, the manufacturer must obtain ISO 9001 certification within one year of the issuance of the manufacturing permit.

Furthermore, for the spread of technology and skill development in Pakistan, the manufacturer has to ensure the transfer of mobile device manufacturing technology within 3 years from the issuance of PTA permission.

Highlighting the transfer of technology, PTA said that it includes complete transfer of chipset design, set design and fabrication, display screen design and fabrication, and connected items like power cables, hands-free, etc.

To promote localization, the PTA requires the manufacturer to ensure the use of local packaging equipment and its log is 2% of the total cost of the device being manufactured, other local the equipment includes a charge, Bluetooth hands-free, motherboard assembly, plastic body of the mobile set, display screen, and battery.

Also, all locally manufactured products must be manufactured to international standards.

The draft PTA obliges the manufacturer to give the regulator 6 months' advance notice to ensure that it has extended the warranty period of its products, after-sales services. Etc. has complied with all legal obligations.

Besides, the application fee for a manufacturing license is 5,000 or equivalent in Pakistani rupees, while the manufacturing permit fee is 50,000 or equivalent in Pakistani rupees.

Similarly, no PTA defaulter can apply for a license and a member or shareholder of a defaulting company etc. cannot own or share in a new company applying for a mobile manufacturing device.

Pakistan's mobile manufacturing policy has been finalized

ISLAMABAD: The Engineering Development Board (EDB) has drafted a mobile device manufacturing policy focusing on replacing imported mobile phones with locally manufactured ones.

Also, Special Assistant to the Prime Minister for Industries and Production Abdul Razzaq Dawood has directed the board to decide the policy by next month.

The Special Assistant to the Prime Minister was briefed by the Engineering Development Board, in which he directed the Board to formulate policy by next month, which would lead to the introduction of Semi-Knocked Down (SKD) and Complete Knocked Down kits in the country.

It may be recalled that EDB is a government organization working for the promotion of the engineering sector and is subordinate to the Ministry of Industry and Production.

Earlier, the EDB had proposed to reduce the duties on mobile parts and give special benefits for the manufacture of these parts so that the imported mobile phones manufactured by SKD and CKD would be fully manufactured.

The Special Assistant was informed that out of 26 licenses, 15 mobile phone sets manufacturing units are operating in Karachi and Central Punjab but these units are producing analog sets and a very limited number of units are manufacturing smartphones locally.

A senior EDB official said that the manufacture of smartphones at the local level had been halted due to the smuggling of high-end smartphones.

However, he added that "strict measures taken by the Pakistan Telecommunications Authority (PTA) has stopped the smuggling of mobile phones in the country as they will become inactive."

He said that expensive duties imposed on smartphones have also discouraged imports.

On the occasion, the Special Assistant said that Special Economic Zones (SEZs) were being provided with technical and financial assistance in various ways by exempting them from duty and tax exemption on electrical appliances and mobile phone set parts.

Standing Committee calls for review of the mobile phone registration system

ISLAMABAD: A parliamentary committee has demanded the Ministry of Information Technology (IT) review the proposed mobile phone registration system and allow people from abroad to bring more than one phone for personal use.

During the meeting, Pakistan People’s Party (PPP) Senator and Chairperson of the Standing Committee on Information Technology and Telecommunications Rubina Khalid said, “Passengers coming to Pakistan is required to register their personal and gifted mobile phones. It is unjustified.

On the occasion, Senator Rehman Malik said, "It falls under the category of harassment and it should end."

The committee also discussed measures to improve the tax collection process for mobile phones at airports.

It may be recalled that in May last year, the Pakistan Telecommunications Authority (PTA) had introduced the Device Identification, Registration, and Blocking (DIRBS) system to curb substandard and smuggled phones.

PTA later announced that the DIRBS would be operational from October 20, after which all unregistered mobiles would be deactivated.

But since then, the Senate Information Technology Committee has repeatedly instructed the IT ministry to block the implementation of the measure.

Later, after the committee declared the mobile phone registration system complicated, the PTA extended the deadline till December 1, but under the pressure of the committee, it was extended from 30 days to 60 days.

It was informed in the meeting that every person coming from outside the application of DIBRS can bring only one additional phone with him and in case of bringing more phones he will have to pay tax.

On the occasion, Senator Miyaan Ateeq directed the Ministry of IT to differentiate between phones for personal use and smuggling.

He said that this system is prevalent in only 2 countries of the world and is unworkable while PTI Senator Faisal Javed disagreed with it saying that it is better for wider benefits but the mobile registration system should be simplified. So that people do not face trouble.

It was informed in the meeting that from January till now, people from abroad applied for the registration of a total of 34 phones out of which 116 people paid tax of Rs 1.5 million on additional mobiles.

Introducing 6 slabs of regulatory duty on mobile phone imports

ISLAMABAD: The government has introduced a regulatory duty on 'Flat Rates' in six different syllabuses on the import value of mobile phones, to impose a lower tax on ordinary phones as compared to higher-priced mobile phones.

According to the Dawn newspaper, the regulatory duty on imports of mobile phones up to 30 will be reduced from Rs 250 to Rs 180 per set, while imports of mobile phones worth more than 500 500 will be charged at Rs 18,500. You have to pay Rs.

Earlier, a regulatory duty of Rs 250 the per set was levied on imports of mobile phones worth up to 60 60, while 10 percent for mobiles priced between 60 60 and 130 130 and 20 percent for mobiles above 130 per head to pay.

The change in the structure of regulatory duty through the Finance Supplementary (Amendment) Bill 2018 will help in generating more revenue by facilitating equitable distribution of mobile phones in the import phase.

The strict strategy has been adopted on mobile phone imports in the wake of reports of duty-free imports through passenger luggage and open sales in the market. To address all this, including mobile phone smuggling, the government has made it a duty to register. A separate payment system has been introduced.

It may be recalled that in May 2018, the Pakistan Telecommunications Authority (PAT) had launched the Device Identification Registration and Blocking System (DIRBS) to curb the smuggling of substandard and used mobile phones in the country.

The government has introduced 6 slabs for regulatory duty on import of mobile phones through notification (SRO 327 of 2019), which will be applicable immediately.

According to the new slab, Rs 1,800 per seat will be subject to regulatory duty on imported mobile phones worth 30 to 100, as well as Rs 2,700 on sets between 100 and 200, more than 200. But mobile phones costing less than 350 will have to pay a regulatory duty of Rs 3,600 per set.

Besides, if the price of an imported mobile phone is between 350 and 500, there will be a flat rate charge of Rs. 10,500, while import of a mobile phone over 500 will incur a regulatory duty of Rs. 18,500. ۔

Officials believe that the flat rate for each slab, regardless of the price of mobile phones will help eliminate the ambiguous imposition of regulatory duties on their imports.

It may be recalled that in 2017-18, the legal import value of Pakistan's mobile phones reached 847.665 million, but before that when there was no duty under the free trade agreement with China or much for other countries. If minor duties had been imposed, the same imports would have exceeded 1 billion.

However, the government recently revised the duty structure and imposed regulatory duty on mobile phone imports, leading to a decline in legal imports and an increase in their smuggling.