Gazi Anowarul Hoque :
The country’s economists and entrepreneurs opined that it’s time to set up mobile phone manufacturing industry in Bangladesh to grab the giant local market worth of about Tk15 billion.
They urged the National Board of Revenue for formulating investment-friendly duties and tax structures to promote such high-tech industry in Bangladesh as the uneven duty structure on the import of prime raw materials of mobile handsets and complete sets is causing major hindrance to the emergence of the local manufacturing sector.
Statistics says that the number of country’s mobile phone subscribers reached 13 crore and about six crore people are using internet. The local market size of mobile phone is about Tk 15 billion.
Analyzing the country’s prevailing duties structure 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 pay about 37 to 40 percent duties and taxes on average. Manufacturing a mobile handset requires about 90 sorts of raw materials. At least 31.5 percent to maximum 95 percent duties and taxes are imposed on those prime raw materials. Among them, 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.
It was revealed that the importers of mobile phone have to pay less duties and taxes compared to manufacturers for importing prime raw materials and equipments.
In the neighbouring country ‘India,’ a total of 17.97 percent duties are imposed on the import of complete mobile handsets. On the other hand, the Indian government imposed only two percent import duties on the prime materials of mobile phone sets. Besides, the Indian entrepreneurs are also enjoying 30 years tax holidy benefit for setting up mobile set manufacturing units.
The industry insiders said that about 23 kinds of heavy machineries have to be installed for manufacturing mobile handsets. Thus, establishment of a mid-range mobile handset-manufacturing unit in Bangladesh requires about one billion taka investment.
“First, formulate investment-friendly duties and tax structure and then we will make investment,” the local entrepreneurs said.
With the aim of highlighting the present barriers to the emergence of mobile handsets manufacturing industry, Bangladesh Mobile Phone Business Association organised a discussion meeting titled “It’s time for flourishing local mobile phone manufacturing industry” at National Press Club on May 16.
Addressing the meeting, Haurn-ur-Rashid, director of Federation of Bangladesh Chamber of Commerce and Industry (FBCCI), said, “We are erecting Padma Bridge, why we will not be able to manufacture mobile phone.”
He also announced of setting up mobile phone manufacturing unit in Bangladesh if the government formulates investment-friendly policies.
Former FBCCI President Kazi Akram Uddin Ahmed said, the entire local demands for mobile handsets are met with the imported sets.
“Although Bangladesh is earning huge foreign currencies through exporting readymade garments, the country has to spend a major portion of these foreign currencies for importing mobile sets,” he said.
Incumbent FBCCI President Matlub Ahmad said, “India and Vietnam are manufacturing mobile handsets, why not Bangladesh. It is our fault, as we prefer import. But now, Bangladesh is in the transitional period to industrialization.”
The local entrepreneurs are now eager to manufacture mobile phone like digital devices, he said and sought proper duties and taxes supports from the NBR.
Former finance adviser of caretaker government Dr AB Mirza Azizul Islam termed the country’s prevailing duty structure on import of prime materials of mobile handsets and complete sets as an anomaly.
“Of course, import duties on prime raw materials and equipments should be lower than the duties on finished products. Otherwise, no assembling or manufacturing units will be built in the country,” he opined.
Terming the formulation of current uneven duty structure as thoughtlessness, another economist Professor Anu Muhammad said such duty structure was formulated to protect the importer’s interest.
Generally, the government has to impose higher import duties on finished products than the duties on the import of prime raw materials and equipments. Otherwise, no entrepreneurs will invest through taking severe risk.
By formulating favourable duty structure, the government should provide chance to those local entrepreneurs who are intending to invest in setting up mobile manufacturing unit in Bangladesh, he noted.
Although there are no mobile sets manufacturing company in Bangladesh, some local brands like Walton, Symphony, Okapia and Elite have been emerged and grabbed a major portion of the giant market.
The country’s economists and entrepreneurs opined that it’s time to set up mobile phone manufacturing industry in Bangladesh to grab the giant local market worth of about Tk15 billion.
They urged the National Board of Revenue for formulating investment-friendly duties and tax structures to promote such high-tech industry in Bangladesh as the uneven duty structure on the import of prime raw materials of mobile handsets and complete sets is causing major hindrance to the emergence of the local manufacturing sector.
Statistics says that the number of country’s mobile phone subscribers reached 13 crore and about six crore people are using internet. The local market size of mobile phone is about Tk 15 billion.
Analyzing the country’s prevailing duties structure 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 pay about 37 to 40 percent duties and taxes on average. Manufacturing a mobile handset requires about 90 sorts of raw materials. At least 31.5 percent to maximum 95 percent duties and taxes are imposed on those prime raw materials. Among them, 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.
It was revealed that the importers of mobile phone have to pay less duties and taxes compared to manufacturers for importing prime raw materials and equipments.
In the neighbouring country ‘India,’ a total of 17.97 percent duties are imposed on the import of complete mobile handsets. On the other hand, the Indian government imposed only two percent import duties on the prime materials of mobile phone sets. Besides, the Indian entrepreneurs are also enjoying 30 years tax holidy benefit for setting up mobile set manufacturing units.
The industry insiders said that about 23 kinds of heavy machineries have to be installed for manufacturing mobile handsets. Thus, establishment of a mid-range mobile handset-manufacturing unit in Bangladesh requires about one billion taka investment.
“First, formulate investment-friendly duties and tax structure and then we will make investment,” the local entrepreneurs said.
With the aim of highlighting the present barriers to the emergence of mobile handsets manufacturing industry, Bangladesh Mobile Phone Business Association organised a discussion meeting titled “It’s time for flourishing local mobile phone manufacturing industry” at National Press Club on May 16.
Addressing the meeting, Haurn-ur-Rashid, director of Federation of Bangladesh Chamber of Commerce and Industry (FBCCI), said, “We are erecting Padma Bridge, why we will not be able to manufacture mobile phone.”
He also announced of setting up mobile phone manufacturing unit in Bangladesh if the government formulates investment-friendly policies.
Former FBCCI President Kazi Akram Uddin Ahmed said, the entire local demands for mobile handsets are met with the imported sets.
“Although Bangladesh is earning huge foreign currencies through exporting readymade garments, the country has to spend a major portion of these foreign currencies for importing mobile sets,” he said.
Incumbent FBCCI President Matlub Ahmad said, “India and Vietnam are manufacturing mobile handsets, why not Bangladesh. It is our fault, as we prefer import. But now, Bangladesh is in the transitional period to industrialization.”
The local entrepreneurs are now eager to manufacture mobile phone like digital devices, he said and sought proper duties and taxes supports from the NBR.
Former finance adviser of caretaker government Dr AB Mirza Azizul Islam termed the country’s prevailing duty structure on import of prime materials of mobile handsets and complete sets as an anomaly.
“Of course, import duties on prime raw materials and equipments should be lower than the duties on finished products. Otherwise, no assembling or manufacturing units will be built in the country,” he opined.
Terming the formulation of current uneven duty structure as thoughtlessness, another economist Professor Anu Muhammad said such duty structure was formulated to protect the importer’s interest.
Generally, the government has to impose higher import duties on finished products than the duties on the import of prime raw materials and equipments. Otherwise, no entrepreneurs will invest through taking severe risk.
By formulating favourable duty structure, the government should provide chance to those local entrepreneurs who are intending to invest in setting up mobile manufacturing unit in Bangladesh, he noted.
Although there are no mobile sets manufacturing company in Bangladesh, some local brands like Walton, Symphony, Okapia and Elite have been emerged and grabbed a major portion of the giant market.
