'Mobile phones have a very important role to play in services enabled by information technology'
The budget for fiscal year 2018-19 is going to bring cheers from the local mobile handset manufacturing industry, as a set of incentives is on the cards to help the industry flourish.
Mobile phones have a very important role to play in services enabled by information technology, Finance Minister Abul Maal Abdul Muhith said at the parliament on Thursday,
In order to help the mobile manufacturing industry flourish and to attract investors to this sector, the minister has proposed to set up a separate self-regulatory organization (SRO) and allow the exemption of VAT on mobile phone manufacturing. The local manufacturing industry will also enjoy the exemption of any surcharge.
On the other hand, the finance minister announced that the proposed budget, if accepted, will see a rise of surcharge on imported mobile handsets from the existing 1% to 2%.
Currently, there is a 1% surcharge on both local and imported handsets. Local industries now pay 16% duty taxes on the import of raw materials, while taxes and duties for imported handsets is a cumulative 30.19%.
In addition to these benefits, the veteran minister also proposed to offer duty benefits on the import of certain raw materials and parts to support the production and assembly of cell phones.
As per his proposals, concessions will be given to 40 raw materials and parts which are required in the manufacture or assembly of mobile phones, with a reduction of 1% from existing rates ranging from 1% to 25%.
Also, duty on the import of raw materials used in the production of components such as lithium ion batteries, lithium polymer batteries, vibrators, USB cables, etc will be reduced to a fixed 10% from existing rates ranging from 10% to 25%.
In Bangladesh, local and international companies have set up factories to assemble and produce mobile handsets. Market insiders say over five million mobile sets are imported to the country every year.
According to data from Bangladesh Telecommunication Regulatory Commission (BTRC), there were 150 million mobile phones in the country as of April 2018.