Smartphone prices are set to go up with the government’s proposal of raising the import duty on smartphones to 25% in the FY2019-20 budget.
Currently the import duty on smartphones is 10%.
However, the price of feature phones will remain unchanged as import duties on them will remain at 10%.
Finance Minister AHM Mustafa Kamal unveiled the next proposed budget in parliament on Thursday.
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.
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.”
According to the proposed budget, transistor and crystal diode tariffs ranged from 5% to 1%, charger connector pins, 25% to 10%, and SIM slot ejector pins, 25% to 10%.
The finance minister also said the number of internet users has crossed 9 crore.
Moreover, mobile phone use is likely to become more expensive as the government has proposed doubling the imposition of a supplementary duty (SD) on mobile phone services—voice and data—from the existing 5%, to 10%.
Taimur Rahman, chief corporate and regulatory affairs officer for Banglalink, said in a statement: “It is unfortunate that the supplementary duty on services provided through mobile phone SIM/RIM cards has been raised from 5% to 10%.”
“Moreover, the SIM tax has also been increased from Tk100 to Tk200. This increase in supplementary duties and the SIM tax will surely hinder the mass adoption of digital services across the country.”
Furthermore, customs duty on the smartphone has been increased from 10% to 25%, considering it to be an item used by affluent people, he said.
“But in reality, smartphone use is increasing gradually in the country, as people irrespective of their financial status have started using smartphones as a means of accessing various digital facilities.”
Last but not least, the increase in the minimum tax (from 0.75% to 2%) on the turnover of mobile companies who are still not profitable will only add to their burden and discourage shareholders of those companies to invest further in the market, the Banglalink official said.
“We strongly urge the government to reconsider these issues to ensure the technological advancement of the country and fulfilling the dream of making a true Digital Bangladesh.” Taimur added.
Read the full budget speech for FY20 here.