NBR considers tax cuts at mobile import, production stages

The National Board of Revenue (NBR) is considering tax concessions on both local production and imports of mobile phones to reduce handset prices for consumers, said NBR Chairman Md Abdul Rahman Khan.

He made the remarks today at an event organised by the Research and Policy Integration for Development (RAPID) in Dhaka.

"No country in the world collects as much tax from trade as we do through imports. This is not always done for the sake of tax collection. In most cases, it is meant to protect our local industries," he said.

Khan said mobile phone manufacturers met him earlier in the day and expressed concern over possible tax reductions on imports.

They also questioned how such a move would affect their investments, particularly with the National Equipment Identification Register (NEIR) set to come into effect.

The NEIR system, which was scheduled to be enforced on December 16 but was later delayed by three months, aims to curb the use of illegally imported mobile phones by requiring handset registration on mobile networks.

Under a temporary arrangement, phones brought in through illegal channels will be allowed to be sold until March 15. After that, unregistered handsets will not be permitted to connect to mobile networks.

Khan said the NBR's objective is to strike a balance among the interests of local manufacturers, importers and consumers.

"We want mobile and smartphone prices in Bangladesh to come down while protecting the interests of all groups and safeguarding consumers. To do that, we are willing to provide concessions at both the import and production stages," he said.

"Since most high-end phones are currently coming through the grey market, we are not actually receiving any real revenue. If we can formalise this through the implementation of NEIR, even if we forgo some revenue, overall revenue will still increase as transactions move to formal channels."

Currently, smartphones are subject to a combined import duty and value-added tax (VAT) of 61.8 percent.

For locally manufactured or assembled handsets, the tax burden ranges between 30 percent and 35 percent, depending on the extent of production and assembly.