ISLAMABAD, Feb 6: The Ministry of Information Technology has proposed to Federal Board of Revenue to withdraw 15 per cent GST on personal computers and networking equipment from the next budget.

Pakistan Computers Association President Munawar Iqbal said in a statement on Wednesday that the IT ministry, after meeting with relevant stakeholders, was fully convinced that the levy must be withdrawn or at least reduced to five per cent.

The government had levied 15 per cent sales tax on PCs and networking equipment some two years back after which sales of PCs and its part were badly hit as prices increased by 20 to 30 per cent.

He said Pakistan Software Export Board, Pakistan Software House Association, Pakistan Computer Association, and other IT-based organisations had already expressed concern and sought removal of sales tax on PCs and its networking parts, saying this had encouraged illegal import of PCs.

Official figures show that the import value of personal computers declined to Rs10.36 billion in the first 10 months of 2007 from Rs14.63 billion over the corresponding period last year.

Mr Iqbal said if the government exempted IT products from taxes, every industry of the country would flourish and it would result in broader tax base in a few years.