Islamabad - The government’s recent decision of giving tax exemption to computers and laptops while charging around 20 percent levy on the import of computer hardware has put the local industry on the verge of collapse.

Two types of computers are available in the market: those assembled abroad, bearing some brand, while the other assembled locally.

Local technicians buy imported hardware and put them together.

These have the same components as those of multinational branded systems and are mostly made in China.

Due to 17 percent tax exemption and 3 percent concession in Value Added Tax, computers and laptops have become 20 percent cheaper.

But tax on the import of computer parts, including hard drive, CPU and some other components, has led to 20 percent rise in the prices of locally assembled systems. “Thousands of IT professionals and small company owners are close to bankruptcy due to the recent decision of exempting computers from tax, but levying 20 percent on the import of parts,” said Munnawar Iqbal, Chairman Pakistan Computer Association.

He said around 0.8 million computers (desktops) were imported annually, while 0.2 million were assembled locally to meet the annual demand for around one million desktops.

He said local assemblers provided economical systems to the users. According to him, locally assembled systems are made of the same parts as the imported computers.

“If tax is withdrawn from parts also, the local industry will revive and thousands of people will be on job again,” Iqbal said.