Zero duty proposed for IT related items
ISLAMABAD (June 09 2008): The Ministry of Information Technology has proposed zero customs tariff rates, in the 2008-09 budget to expand IT industry, making e-governance efficient and cost-effective, sources told Business Recorder here on Saturday.
They said that several devices are used by the IT companies for research and development (R & D), and cut in duty rates will encourage these companies in new products development.
Moreover, many universities and other organisations keep their educational, promotional and training material in digital format. Reduction in tariff would encourage paperless environment, and help encourage automation, sources added.
The CRT monitors are more power consuming and hazardous, radiation-emitting devices. On the contrary, LCD and plasma displays are power-efficient and environment-friendly devices, and are widely used by all segments of IT industry, and other sectors of the economy and general public. The present energy crisis calls for exemption of customs levy on these items, sources said.
Following are the items for which current (2007-08) rates of customs duty are given, while proposed rate for 2008-09 for all items is zero percent.
Machines which perform two or more functions of printing, copying or facsimile transmission, capable of connecting to an automatic data processing machine or to a network, rate of customs duty 2007-08 is 5 percent; battery chargers 10 percent; modems 5 percent; ISDN System 5percent; ISDN terminal adapters 5 percent; subscriber end equipment 5percent; set top boxes for gaining access to internet 5percent; attachments for telephones 5 percent; apparatus operated by coins, bank notes, bank cards, tokens or by other means of payment 20 percent; discs for laser reading systems for reproducing phenomena other than sound or image 5percent; multimedia memory cards (MMC), SD cards, 5 percent; other multimedia storage devices capable of connecting to an automatic data processing machine, 5 percent; SIM cards, 5 percent; other, for reproducing representations of instructions, data sound and image, recorded in a machine readable binary form, and capable of being manipulated or providing interactivity to a user, by means of an automatic data processing machine, 5 percent; blue tooth whether or not capable of connecting to an automatic data processing machine, 5 percent; VSAT terminals, 10 percent; other satellite communication equipment, 10 percent; other (used monitors other than CRT), 25 percent; other (used LCDs), 25 percent; and multimedia projector 5 percent.
In the IT Ministry proposals it has also been suggested that additional call centre/BPO equipment/machinery should be included for decrease in duty.
The Federal Board of Revenue (FBR) in response invited the ministry to provide FBR a list of additional call centre/BPO machinery and equipment, ie, data storage devices; digital loop carrier system (digital sender); part (voice cards); other (digital call recorders) and VAST terminals.
The inclusion of proposed machinery and equipment used by the call centre/BPO industry will enlarge the scope of total exemption from sales tax and chargeable to reduce rate of 5 percent customs duty and thus help grow this promising segment of IT industry, create job opportunities and enhance ITeS exports from Pakistan, attracting foreign investment.
After the proposed change the additional machinery and equipment used by call centre/BPO industry would become totally exempt from sales tax and chargeable to reduced rate of 5 percent customs duty.
Finally, common sense prevails!