Anyone planning to buy a new smartphone must decide within the next few days, because from 1 July the same phone could cost several thousand taka more.
In January this year, the interim government granted a 15 percent duty waiver on mobile phone imports. This temporary benefit expires on 30 June. Unless a fresh decision comes, the tax burden will rise from 1 July, which could directly affect the retail phone market.
On this, the importers’ body, the Mobile Phone Industry Owners Association of Bangladesh (MIOB), sent a letter to the Bangladesh Telecommunication Regulatory Commission (BTRC) on 18 June. In the letter, the body said that if the duty benefit was not extended, the total tax burden on imported phones would rise to 64.25 percent.
MIOB sources say that if the tax burden rises, the price of imported phones could rise by 20 to 25 percent. Asked about it, the body’s president, Zakaria Shahid, told Prothom Alo that the prices of various components such as memory chips, motherboards, CPUs and batteries were rising on the global market, so it was not possible to cut phone prices. If import tax rose on top of that, phone prices would rise further, he said, and many buyers might again turn to the “grey market” to buy phones cheaply.
The proposed budget for the coming fiscal year contains no announcement of keeping this duty benefit for fully built phones brought from abroad. So the market is watching the government’s decision over the next few days.
In January this year, the government cut the customs duty on imported phones from 25 percent to 10 percent. As a result, the total tax burden on imported phones — including VAT, advance income tax and other taxes — fell to 43.43 percent, with a term up to 30 June.
Asked about the matter, BTRC chairman Major General (retd) Emdad Ul Bari declined to comment.
“Unofficial” phone sales have not fallen. A mobile-phone assembly and manufacturing industry has grown in the country over the past decade, with local factories mainly assembling low- and mid-priced phones. But industry insiders say many premium models from Apple, Google, Huawei, Motorola, Samsung and Xiaomi cannot be commercially produced locally, due to complex supply chains, specialised components and limited market demand.
Two kinds of phone — “official” and “unofficial” — are sold in the country. Because of their comparatively low price, buyers are also more interested in phones brought in informally, but this costs the government revenue year after year. To curb this trend, the BTRC announced the launch of the National Equipment Identity Register (NEIR) early this year, aimed at bringing informal or grey-market phones under control.
According to IT entrepreneur Fahim Mashrur, smartphones are no longer a luxury but a main medium for education, earning a living and various digital services, so the pressure of price rises will ultimately be borne by ordinary consumers.
At the same time, the government also decided to cut duty to reduce the price of legally imported phones, on the argument that narrowing the price gap between legal and illegal phones would encourage buyers to buy legally imported ones.
But the expected effect was not seen in the market. Even before the duty cut, the prices of various brands of phones had been raised by Tk 500 to Tk 5,000, with traders citing a rise in memory-chip prices on the global market. The unofficial phone market, too, could not be shut down, with unofficial phones being sold regularly in various shopping malls in the capital.
If the government’s temporary duty benefit is withdrawn, the tax burden at the import stage will rise again, with a direct effect on retail prices — so the extra cost will ultimately fall on the customer. Added to already-raised prices, the new tax will push up the cost of buying a smartphone further.
IT entrepreneur Fahim Mashrur expressed concern over this. Raising smartphone prices means making access to digital services more expensive, he told Prothom Alo, adding that smartphones should be treated as part of digital infrastructure and the tax burden on them reduced.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report