The recently announced budget for the fiscal year 2024-25 brings several significant changes that will impact the gadgets and technology market in Pakistan. Finance Minister Muhammad Aurangzeb’s budget presentation included new tax policies and economic measures that could affect both buyers and sellers of gadgets such as mobile phones, laptops, and other electronic devices. Here’s a breakdown of the most relevant points for our audience at Lain Dain
Increase in Minimum Wage and Salaries
The minimum wage is set to increase to Rs37,000 from the current Rs32,000. Additionally, salaries for government employees will see an increment, with grades 1-16 getting a 25% increase and grades 17-22 receiving a 20% hike. This rise in disposable income could potentially boost consumer spending on gadgets and electronics.
Changes in Income Tax Rates
The budget introduces new income tax slabs for both salaried and non-salaried individuals, which could influence purchasing power and market dynamics.
For Salaried Individuals:
Income up to Rs600,000: 0%
Income between Rs600,000-1,200,000: 5%
Income between Rs1,200,000-2,200,000: 15%
Income between Rs2,200,000-3,200,000: 25%
Income between Rs3,200,000-4,100,000: 30%
Income exceeding Rs4,100,000: 35%
For Non-Salaried Individuals:
Income up to Rs600,000: 0%
Income between Rs600,000-1,200,000: 15%
Income between Rs1,200,000-1,600,000: 20%
Income between Rs1,600,000-3,200,000: 30%
Income between Rs3,200,000-5,600,000: 40%
Income exceeding Rs5,600,000: 45%
Higher Taxes on Mobile Phones
The budget proposes significant changes to the sales tax regime for mobile phones, which will likely make them more expensive.
➢ A flat 18% ad valorem sales tax on all mobile phones up to the value of $500 for imported completely built, imported semi-built, and locally manufactured completely built units.
➢ For cellphones costing above $500:
o 25% ad valorem sales tax for imported completely built units.
o 18% for imported semi-built and locally manufactured completely built units.
Withholding Tax and Documentation
The budget proposes broadening the scope of withholding tax and increasing rates for non-filers to encourage proper documentation and compliance.
➢ Advance tax to be collected from all sectors, not just specified ones.
➢ Increased rates for non-filer: 2% for dealers, distributors, and wholesalers, and 2.5% for retailers.
Tax on Imported Electronics
A 10% sales tax will be imposed on imported personal computers, laptops, and notebooks, potentially raising prices for these items.
Measures to Discourage Non-Filers
To crack down on non-filers, the budget includes various penalties and measures such as blocking mobile SIMs, severing utility connections, and barring non-filers from exiting Pakistan, except for Hajj and Umrah travelers, minors, students, and overseas Pakistanis.
Conclusion
The budget for 2024-25 introduces several measures that will directly impact the cost and accessibility of gadgets and electronics in Pakistan. As a marketplace dedicated to buying and selling gadgets, Lain Dain will keep a close eye on these developments to help our users navigate these changes and make informed decisions.
Stay tuned for more updates and insights on how these budget changes will affect your buying and selling experience on Lain Dain.
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