Since this sales tax was imposed last year, the general IT industry in Pakistan, local PC/Server manufacturers and IT retailers, have strongly advocated its removal. The 15% General Sales Tax, or GST, is currently applicable to all IT purchases. Critics of the tax argue that it is too soon to impose any inhibitors on the growth of the PC industry and PC/Internet adoption in Pakistan. The Government’s oft-stated goal is to achieve 50% PC penetration in the population in the next 3-5 years; in number terms, this would mean about 80-90 Million PCs in use in Pakistan. These targets will clearly have to be curtailed if the less affluent rural population is expected to pay a 15% premium on the price of a PC.

But it seems like those arguing for the elimination of this tax have finally prevailed. The DAWN reports in its business section, that during a meeting of the caretaker federal minister for information technology, Mr. Abdullah Riar, with the President of the Pakistan Computer Association, Mr. Munawar Iqbal, the minister disclosed that the Government has decided to withdraw this tax in the next budget.

 The Daily DAWN reports:

15pc GST on computer items to go

ISLAMABAD, Jan 14: The government will withdraw the 15 per cent general sales tax (GST) on computer items from the next financial year.This was stated by the Caretaker Federal Minister of Information Technology Abdullah Riar in a meeting with a delegation of Pakistan Computer Association headed by its president Munawar Iqbal here on Monday.

The minister assured the delegation that the ministry will send the summary to Federal Board of Revenue (FBR) to eliminate the sales tax on computer products from the next budget.

The minister further said that awareness about computer usage in Pakistan was in primary phase and most of the computer users lived in urban areas of Pakistan.

He said that the government had been trying that 50 percent population should use computers. He suggested that the government should also eliminate the taxes on computers import.