Mobile phone manufacturers have claimed that the government is losing an estimated Tk5,000 to Tk6,000 crore in revenue every year due to illegal or gray market smartphones in the country. They demanded immediate and strict implementation of the National Equipment Identity Register (NEIR) or mobile phone registration system to prevent this loss and protect the domestic mobile industry.
These demands were raised at a press conference titled ‘Safe Bangladesh through NEIR’ at a hotel in the capital on Tuesday (January 6).
The press conference was organized by the Mobile Phone Industry Owners Association of Bangladesh (MIOB).
Ziauddin Chowdhury, country manager of Xiaomi Bangladesh and executive member of MIOB, presented the keynote address at the press conference.
He also said that currently, about 20% of smartphones entering the country are coming through illegal channels or through the gray market. As a result, smartphone transactions worth about Tk10,000 crore per year remain outside the formal economy, depriving the government of a huge amount of taxes and revenue.
He said that the official sale of smartphones priced above Tk30,000 has practically come to a standstill. Despite domestic production capacity and expertise, it is not possible for local manufacturers to compete with the grey market products that evade 43% tax. If NEIR is implemented, illegal phones will be removed from the market, local production will increase and the price of smartphones will come within the reach of the common man.
Regarding the claim made by a section of mobile traders that thousands of shops will close if illegal phones are closed, Chowdhury said that a study conducted by Insight Metrics Limited has shown that there are about 13,000 retail shops selling smartphones in the country. Of these, about 90% of the shops sell legal and official products.
Only 1,000 to 1,500 shops are exclusively involved in the business of used or unauthorized phones. Therefore, the claim that 20,000 shops will be closed or 2 million families will be affected is unrealistic and just a tactic to garner public support, he commented.
Supporting the government's revenue collection goal, he called for a review of the existing 43% tax on smartphones in the upcoming budget. Ziauddin Chowdhury said that smartphones should not be seen as a luxury item to be taxed only once. It is an important means of recurring revenue generation through mobile financial services (MFS), data usage and digital banking. If smartphones are easily available, the country's digital economy and technology-based growth will accelerate further.
MIOB president Zakaria Shahid said that there is a misconception about the domestic mobile industry that only components are assembled here. In reality, now local manufacturers have gone beyond the simple assembly method and reached advanced production stages like Surface Mount Technology (SMT) and Printed Circuit Board Assembly (PCBA).
He said that currently 15%-20% value addition is being done on smartphones manufactured in the country, which is at par with many neighboring countries.
He hoped that if NEIR is implemented effectively, an orderly and transparent market will be created and it will be possible to produce even high-priced smartphones domestically and deliver them to consumers at comparatively lower prices.
