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July 7, 2006

ST on computers to increase smuggling

Top Story

July 7, 2006

KARACHI: In the recent budget for FY2006-07, 15 per cent sales tax was levied on computer and associated accessories and withholding tax was reduced from 5 per cent to one per cent. This policy has raised reservations among computer importers.

Salahuddin Ahmad, Chairman Special Sub Committee Information Technology, Karachi Chamber of Commerce and Industry (KCCI) says in an interview with The News; “National and multinational companies can afford this tax but small and medium enterprises that are converting their business data and communication from manual to computerised, would be affected badly and the pace of technology advancement in the society would slow down.”

Salahuddin, who has been importing computers and its related accessories for last 32 years, claimed that 15 per cent sale tax would put computers beyond the reach of large number of users while its education in small schools would be impossible.

He said computer smuggling from Far East and Middle East would soar and government would lose revenues and legal importers would face restraints in the market.

Referring to the piracy of software, Chairman Sub-Committee KCCI said it is very serious concern for the country but it could not be control until some remedial measures are taken between government authorities and the manufacturers of software.

“Software manufacturers should offer incentives and make products affordable for the masses of,” he suggested.

“India buys licensed software for two dollar but Pakistan buys the same in fifty dollar so the ratio of piracy would gear up and the manufacturing companies neither get any advantage from their products,” he pointed out.

Salahuddin said there was no local hardware manufacturer because it has no demand in Pakistan and computer export was impossible in the presence of international big players.

He said the whole computer system of KCCI was being upgraded to provide rapid service to its

members.

Chairman sub-committee also told that new system being built from the five million rupees grant would facilitate foreign investors and businessmen.

“We (KCCI) have inked an agreement with Microsoft which would assist the chamber and its members in introduction of new technology to update the business but increase the products efficiency also.”

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