ISLAMABAD, Sept 1: With the imposition of 15pc general sales tax (GST), the price of computer equipment and hardware would increase by more than 20 per cent due to multiplicity of levy at different stages.

“The levy will encourage smuggling leading to revenue loss to the national kitty. The Bara markets are now flooded with smuggled printers, laptops and other accessories, which were previously not available in bulk quantities due to nominal duty difference," Pakistan Computer Association (PCA) President Munawar Iqbal told Dawn on Friday.

He said that the levy would affect seriously to promote Information Technology education at affordable price to less privileged segment of society.

He said that according to estimates around 75,000 IT professionals were employed in the sector and those engaged in export-oriented were about 6,000 t0 8,000.

Answering a question he said that the association had held several meetings with the tax officials on the issue but they did not respond positively.

He further said that the revival of the green channel would also encourage smuggling of laptops and other computer accessories.The PCA president said local manufacturers would now find it very difficult to compete with foreign brands due to abolition of the duty and imposition of GST. This in turn would lead to closure of their industry resulting into further unemployment, he added.

The growth of call centres, being the nascent industry, would also be hampered thus discouraging foreign and local investment, he said and added it was estimated this industry had shown a growth of approximately 60 per cent by absorbing thousands of IT-literate young people.

Mr Iqbal said that it was apprehended that the GST would increase their cost of doing business and relocating to neighbouring country. He said that export of IT-enabled services during the 2005-06 stood at $72 million.

He said that the PCA had proposed to the Central Board of Revenue that if the GST could not be withdrawn then at least its scope should be restricted.

It was proposed that GST should not be levied on processors, RAM, hard disc drives and USB drives and similar small products. He said the rationale behind demanding abolition of GST was that all these products were prone to smuggling because of their size and value.