Household electronics prices soar after imposition of 40% duty on 'luxury' items

[Naveed Yaseen]

By Faryal Najeeb
KARACHI: Following the decision of the government to increase import duties, prices of almost all electronic goods have skyrocketed by 40 per cent triggering hue and cry from consumers and dealers alike.

Refrigerators, washing machines, split air conditioners, window A/C, fans, juicers and blenders, mobile phones, microwaves and handset telephones are some of the electronic items that have witnessed price hikes of at least 30 per cent.

According to the Federal Board of Revenue, a list of luxury goods such as gas burner cooking ranges, microwaves, pedestal/exhaust/ceiling/table fans, air conditioners, refrigerators and freezers and washing machines would have 15 per cent additional customs duty imposed on them. Whereas on other items such as electric cooking ranges including ovens and grillers, toasters, coffee makers, hair dryers, irons and juicers, blenders and mixers 20 per cent additional customs duty was imposed amongst many products.

Dealers said electronic goods that were earlier under the common man’s reach were now being described under the category of luxury items which made them unaffordable for the lower class people. Some cited examples of price differences as follows: a 20-inch television set costing Rs10,000 earlier is now tagged at Rs16,000, 1.5 ton split air-conditioners costing Rs36,000 were now priced at Rs44,500, simple kitchen blenders earlier priced at Rs1,000 were now Rs2,500 whereas mobile phones had earlier witnessed an additional duty of Rs500 and this time it had been hiked by a further Rs250 per cellphone.

Dealers feared that their businesses are likely to be affected by approximately 80 per cent leading to high chances of business failure. They were highly critical of the irrational decisions taken by the government and in fact went on to say that the democratically elected government had disappointed them far more than the previous one ever had.

They demanded to know who was making the decisions that were actually leading towards a further push in the already high inflation, adding to the burden of the common people of Pakistan.

Mohammad Rizwan, an office bearer of the Karachi Electronics Dealers Association, said the government was actually digging its own grave as smuggling of electronics items from the Afghanistan border was likely to increase which would stop all legal channel revenue.

He said over the years the smuggling had decreased to an insignificant level as the previous government had facilitated manufacturers and dealers of which they had been deprived of in the recent months.

“Most of the manufacturing companies closed their factories here and begin to import both raw materials and finished goods from abroad (especially China) when local manufacturing of the products actually become dearer,” he added.

Rizwan stressed that as long as the government continued to make its own decisions without consulting the stakeholders such as the dealers themselves, they were heading towards disaster which would eventually lead towards downfall of the country.

http://www.thenews.com.pk/daily_detail.asp?id=132697