Mobile sets to get costlier

Customers will have to pay more for buying mobile handsets as the finance minister has proposed doubling the customs duty on import of handsets to 10 percent.

Buyers will have to spend around Tk 1,300 more for a Tk 20,000 handset, according to importers.

Under the duty structure of the 2016-17 national budget, there were 24.40 percent tax on handset imports. The tax has been increased to 30.61 percent.

The new duty structure came into force yesterday afternoon, said Ruhul Alam Al Mahbub Manik, president of Bangladesh Mobile Phone Importers Association (BMPIA).

Finance Minister AMA Muhith proposed increasing the customs duty on the import of internet modem, a key device for using internet, to 10 percent from 5 percent.

Importers and mobile phone operators feared the new proposals would have a bad impact on the industry and the government's digitalisation programme.

TIM Nurul Kabir, secretary general of Association of Mobile Telecom Operators of Bangladesh (AMTOB), said the government's decision could create new hurdles to the country's economic growth and development.

Expressing frustration at the new taxation proposals, he said: “Mobile phones and internet modems are the main devices for using internet and hiking their prices will have a negative impact on the government's digitalisation programme.”

Mobile phone operators said increased tax on handset imports would also affect their business growth.

According to Bangladesh Telecommunication Regulatory Commission (BTRC), there were 6.72 crore internet connections in the country, including 6.30 crore from mobile phones, as of February.

Around 3.10 crore mobile handsets were imported to the country last year, up by 11 percent year-on-year, at a cost of about Tk 8,000 crore. Of the amount, smartphone imports accounted for Tk 6,500 crore, said BMPIA sources.

ACCESSORIES TO GET CHEAPER

Muhith yesterday also proposed cutting the customs duty on the imports of 34 raw materials and accessories required for assembling and manufacturing laptop and tablet computers and mobile handsets.

Edison Group, the parent company of the market leader mobile handset brand Symphony, said it was confused about the government's tax proposals.

The firm, which plans to set up a handset assembling unit, said it would take two to three years to build the plant. Increasing customs duty on handset imports before that period would mean penalising phone users and hampering the digitalisation programme, said Jakaria Shahid, managing director of Edison Group.

BMPIA President Manik welcomed the relaxation of tax on 34 raw materials and accessories.

“We will place our demand before the finance ministry to keep the current fiscal's duty structure on handset imports unchanged,” he told The Daily Star.

According to him, Bangladesh is currently the ninth largest handset-using country in the world and soon it will move to the seventh position. Being a country with such a large number of mobile phone users, setting up handset assembling units will be necessary.

Masum Jamali, a mobile phone user, said he was thinking of buying a new handset, but he was doubtful about buying the phone of his choice as the prices already went up.

Importers said increased customs duty would give rise to import of handsets through illegal channels.

However, local firm Indigo Group, who set up an assembling plant at the state-owned Telephone Shilpa Sangstha a few years ago, welcomed the government's duty proposals.

“Now we can compete in the market and can save valuable foreign currency,” said Kazi Zashimul Islam, president of Indigo Group, which mainly assembles low cost handsets.