May mark the end of small importers
It has been proposed that the import duty on function and button cell phones increases the additional duty by 15% for the next fiscal year 2021-22.
The current rate of duty for additional duties in the case of imported multifunction telephones is 10%. It has been proposed to increase it to 25%.
This will drive up cellphone prices and could lead to the end of small-scale cellphone importers.
According to AHM Finance Minister Mustafa Kamal, during his national budget speech on Thursday, the tariff hike was proposed to boost the local mobile phone manufacturing industry.
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“I propose to make the existing concessions on the import of raw materials from this industry more favorable to investments and more rational and to increase the tariff on the import of multifunction telephones to protect the national industry,” he said. he points out, while also proposing to exempt domestic producers from value added tax (VAT)
“Currently, most of the mobiles used in the country are manufactured and assembled in this country. I propose to increase the existing VAT exemption scheme for local cell phone manufacturing and assembly companies for another two years, ”he added.
The total tariff will increase by around 50% from the existing 35%, said the Bangladesh Mobile Phone Importers Association (BMPIA),
BMPIA, an organization of national mobile phone importers, welcomed the move.
“We have about 12 manufacturing plants that meet local demand. If import tariffs increase, local manufacturing companies will be inspired. In addition, employment will increase, which is necessary for our country, ”said Zakaria Shahid, secretary general of the association.
But the proposal is also unfavorable to mobile importers, he also said.
Small traders, or businesses that import small quantities and only do import-based business, will be in trouble if this proposal is approved.
However, he also said the National Board of Revenue (NBR) needed to change the policy so that these small businesses could ensure the production of the same phones at local factories.
Despite the increase in the use of smartphones, around 70% of the total number of subscribers in the country still use multifunction phones.
According to the BMPIA, there is currently a handset market over Tk 10,000 crore in the country.