ISLAMABAD, July 18: The 15 percent general sales tax (GST) on import of hardware, had brought down the local sale of computers by 30 to 40 per cent during the last two months.

This was stated by the president of All Pakistan Computer Association Munawar Iqbal in a statement issued here on Tuesday.

The GST was levied on computer hardware in the budget 2006-07.

He said that businessmen were planning for re-export to central Asian republics (CARs) and intended to make Pakistan a hub for these countries, but due to government decision this process could not be implemented.

Mr Iqbal said most of the government departments were passing through the process of computerization, but computer had become costly with imposition of the sales tax.

Moreover, he said in the educational institutions, purchase of computers for laboratories has decreased, whereas the educational institutions were considering to increase their fees.

FPCCI Vice President Zubair Ahmed Malik said there were only four producers of computer hardware in Pakistan and they too sell imported items with their own name and brand.

With the imposition of sales tax, smuggling would be encouraged and in addition to that 6 per cent withholding tax should be introduced again.

He said that with the imposition of general sales tax the computer education would become costlier.