POST TIME: 20 June, 2019 01:08:02 AM
Additional duty on smartphones to ‘boost illegal imports’
Businesses demand withdrawal of 10pc supplementary duty

Additional duty on smartphones to ‘boost illegal imports’

Bangladesh Mobile Phone Business Association (BMPA) has demanded withdrawal of supplementary duty on imported smartphones and requested the government to retain the existing 10 per cent duty.

The association at a post budget press conference yesterday said that the duty imposed on smartphones will push up illegal imports and will increase risk to the national security.   

The trade body said the proposed 25 per cent import duty in the budget for fiscal 2019-20 will not only boost illegal imports also causing big revenue losses of government.

The budget for fiscal 2019-20 proposed to hike the supplementary duty on imported smartphones to 25 per cent from existing 10.

“The duty proposed on smartphone will go against the vision of Digital Bangladesh and push up illegal imports,” Nizam Uddin Jitu, president of BMBA, said at a post budget press conference at the National Press Club in the capital.

BMBA said with the existing 10 per cent import duty, currently importers pay about 31.75 per cent in taxes, and if the proposal for 25 per cent is passed, they will have to pay 57.31 per cent tax.

“We are predicting, the government would lose Tk 2,000 crore revenue due to illegal imports for the proposed tax,” said Md Nizam Uddin Jitu, president of BMBA.

BMBA, however, thanked the government as it is trying to promote locally assembled smartphones. But, it opined this is not the proper time to rely fully on local assemblers.

The BMBA rather suggested the government allow the local importers and entrepreneurs two more years’ time to set up another 15 to 20 plants. “If the government then goes to hike duty, it would benefit the country,” added BMBA.

Currently, five firms are assembling about 30 per cent of the country’s annual demand of three crore handsets.

Finance Minister AHM Mustafa Kamal unveiled the next proposed budget in parliament on Thursday.

In his budget speech, the finance minister said: “five to six cellular phone production and apparel companies have been set up in the country already. To give the sector a boost, we propose to reduce import tariffs for certain production sectors of cellular phones.”

The finance minister also said the number of internet users has crossed 9 crore.

Walton was the first company to take up assembling. They have been producing different types of handsets for the past one year. Meanwhile market leader Symphony started assembling last month aiming to cater to the local market.

The upcoming national budget totaling Tk5,23,190 crore for the forthcoming financial year is the highest ever in the country, and the first national budget presented by Finance Minister AHM Mustafa Kamal.