Gazi Anowarul Hoque :
The duty discrimination between imported mobile phone sets and its prime raw materials hindering emergence of mobile phone manufacturing industry in Bangladesh, local entrepreneurs said.
The discrimination also leading the local handset market worth of around Tk 10 billion to remain under import dependent, they added.
Bangladesh with over 160 million populations is a rising market for mobile phone industry. The entire local demands are meeting with imported handsets–mostly from china.
Consequently, the country has to count huge amount of hard earned foreign currencies as import bills. Besides, some unscrupulous businessmen are importing inferior quality’s handsets to make extra profits and thus the users are being cheated.
Although there are some local entrepreneurs who have keen interest in setting up mobile phone manufacturing units in Bangladesh, they are disheartened following the higher import duties on prime raw materials comparing with the duties for complete handsets.
Analyzing the country’s prevailing duties structure, it was found that the local importers of finished mobile phone has to pay total of 23.75 percent duties and taxes, including customs duty, value added tax and two percent advance income tax. But, if any local entrepreneurs import prime raw materials and equipments for manufacturing mobile phone in the country, they will have to on average 37 to 40 percent duties and taxes.
It was revealed that the importers of mobile phone have to pay less duties and taxes compared to the import of prime raw materials and equipments for manufacturing mobile handsets.
The industry insiders informed that about 90 sorts of raw materials required for manufactue a mobile phone, most of them are imported. At least 31.5 percent to maximum 95 percent duties and taxes are imposed on those materials although no local manufacturers produce those items within the country.
However, among the necessary raw materials to assemble a hand set, 53.35 percent import taxes are imposed on battery; 31.50 percent taxes on PCB (Printed Circuit Board) or motherboard, 31.50 percent on LCD device, 53.35 percent on earphone and about 95 percent taxes on screw void sticker import etc.
Such discrimination in the import duty structure for the fully made mobile phone and its necessary raw materials made a barrier to the flourish of mobile phone manufacturing industry in Bangladesh, the local entrepreneurs said adding, “If such kind of high-tech industry is being set up in Bangladesh, the country’ could save huge amount of foreign currencies every year and at the same time, customers could get phone sets at affordable price.
Of late, the proposed Computer and Mobile Manufacturers and Exporters Association of Bangladesh submitted an application to the Ministry of Post, Telecommunications and Information Technology seeking exemption of duties and VAT on imports of prime raw materials and capital machineries needed for manufacturing mobile in Bangladesh at least for the next 10 years by issuing SRO (Statutory Regulatory Order).
The association leaders also demanded withdrawal of value added tax on local production, which the government had given the same facility for computer, modem, software, monitor and so on through issuing SRO.
The entrepreneurs claimed that they would be able to cater to the entire colossal demand with locally made handsets if the government withdraws prevailing duties and VAT on the items.
While addressing a discussion meeting on “This is the right time for flourishing local mobile phone industry” as the chief guest at National Press Club on Monday, Industries Minister Amir Hossain Amu assured the local entrepreneurs of providing all sorts of support to protect local investment of this sector.
During that meeting, veteran ICT expert Mustafa Jabbar questioned, “Are we remained dependent on import?
Now, the time has come to turn us into a mobile phone manufacturing country from an importing country. To this extent, the government has to bring down the prevailing duties and taxes against import to zero level, he said.
However, the Senior Secretary of Finance Ministry Mahbub Ahmed assured that the government will take all kinds of strategies in the next budget for boosting local investment and employment opportunities.
Chairman of National Board of Revenue Md Najibur Rahman also said the media on Sunday last that the government will ensure all kinds of policy supports in the imminent budget for the fiscal year 2016-17 to protect the local industry.
