Thursday, April 18, 2013

Phones Smuggled to Lebanon

An article is going viral on Facebook about how the Ministry of Economy & Trade and the Ministry of Telecommunication & Post are planning on stifling the illegal smuggling of mobile phones to Lebanon.

Basically, starting June, any mobile phone that connects to the networks, whose serial number is not registered in their DB will not be allowed to connect to this network. As said, the measure targets the illegal smuggling of cell phones through non-official channels. 

I can see people outraged on Facebook (and even by e-mail). I cannot see why!

As a citizen of the state, if others do not pay VAT and customs for their phones, I will lose. I will, because the revenues stemming from the purchase of the phone won't count towards my GDP, and the taxes as lost revenue will have to be incurred in other forms of taxation, be it borrowing or direct/indirect taxes. 

When Amhaz can sell an iPhone at the price of, then Amhaz is surely doing something wrong. And because of our nature as Lebanese (and I'm sure to a more broader extent as humans) people would feel duped for buying a phone at the Lebanese market rate when they can buy it, knowingly, for far less from an illegal channel. Also, because the Amhaz's (and I believe Class too) are getting more and more famous and rely on word of mouth, these people are getting more and more buyers and causing further losses to the economy. 

As a regular consumer, I want phones to be sold through official channels, because these phones are properly tested, they are under warranty, they are designed for my country (a phone brought from the Gulf will not show caller ID for a 03 number because phones expect 7 not 6 digits!) and they are the responsibility of the seller if they do not work. Class or Amhaz could sell you a faulty product and tell you it's your problem and charge you unimaginable amounts for fixing them. 

I realize that this causes a burden on the Lebanese population, but I swear iPhones and SIIIs have their own stock market here in Lebanon. The price of an iPhone can vary between one day and the next by a significant margins, so there is substantial demand for extremely costly non-essential items. When it's a luxury item such as that, people cannot complain about having to pay 20% more for the Government. The article states that the treasury can benefit up to $60 million, which means there's at least an underground economy of $300 million going through illegal channels, and someone has to have a grasp about that. 

Lastly, as a regular consumer and as a citizen, such moves would encourage someone to get the franchise of the official Apple Store and open it in Lebanon, thus getting the Genius Bar here, better service, in addition to investment in the economy. I mention Apple, but I mean others too.

I e-mailed with a friend, and chatted to two others about this, and got some arguments:

This won't stop the smuggling of weapons. Well if we can do one thing right around 100 things wrong, let's do it anyway.
Why this and not that? Because this is one of the easiest options. Your phone's serial number is registered directly when your phone connects. If we could somehow have a technological solution for guns, then let's do that too.
What if I buy my phone while shopping in Dubai? You'll pay your VAT and customs and register your phone. Fair and square.
We're adding a burden at the airport. I'm sure we've all faced much worse burdens at the airport, but sure this could be a hassle. I think if they find an easy practical way for it, then they should apply it to avoid the trouble to our much needed tourists.

1 comment:

  1. Nothing new here...

    The Lebanese government picks the least significant issues and tries to resolve them by passing unreasonable laws while leaving matters related to human rights and people's safety untouched.

    Seems like some minister is wanting to buy another yacht and is looking for a way to pay for it out of people's pockets.

    I live in the states and every once in a while I send a cell phone to Lebanon as a gift...does this mean I have to pay 20% VAT so the phone can be used in Lebanon? Bull shit.


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