According to insiders, the government is expected to propose granting tax breaks to local manufacturers of electronics in the upcoming fiscal year (FY) 2022-23 budget, while imposing hefty taxes on finished goods imports.
However, imports of raw materials for ICT products would be aided by tax exemptions and fully assembled laptops, desktops, printers, and other ICT items would be subject to the increased import duties.
According to the sources, the measures would be included in the national budget, which will be presented to before the parliament on June 9.
Imports of laptops, desktop computers, printers, and other completed computer and ICT equipment are currently subject to a only a 5% duty.
To help and expand the local hardware industry, the government may change the current tax provision and charge a higher duty on such finished products.
In FY 2022-23, importing a finished laptop may require paying a 20% duty.
State Minister for ICT Division Zunaid Ahmed Palak in an official letter to NBR chairman Abu Hena Md Rahmatul Muneem on April 19, proposed to include the raw materials required for manufacturing computer, PCB IT, IOT, and digital devices with a “Made in Bangladesh” tag in the relevant SRO of the VAT law to offer exemption at import and local stages.
According to industry insiders, VAT exemption is now being given partially to certain ICT goods, with most raw components being excluded.
Manufacturers are unable to fully capitalize from the partial VAT exemption policy, resulting in price increases for locally manufactured computers and accessories.
They also claim that the local ICT product manufacturers face unfair competition in the international market for this.
