Bangladesh’s tax authority is considering reducing duties on both locally produced and imported mobile phones to lower handset prices for consumers, a move that could reshape the market as the country prepares to enforce tighter controls on illegal devices.
Md Abdul Rahman Khan, chairman of the National Board of Revenue, said the proposal aims to balance the interests of manufacturers, importers and buyers, while encouraging a shift away from informal trade channels that currently dominate sales of higher-end devices.
Speaking on Tuesday at an event in Dhaka organised by Research and Policy Integration for Development, Khan said Bangladesh relies heavily on trade-based taxes, particularly on imports, more than most countries.
“No country in the world collects as much tax from trade as we do through imports,” he said. “This is not always done purely to raise revenue. In many cases, it is intended to protect local industries.”
Khan said domestic mobile phone manufacturers met him earlier in the day and raised concerns about possible tax reductions on imported handsets, questioning how such a policy shift might affect their investments. The issue has taken on added urgency with the planned rollout of the National Equipment Identification Register, or NEIR, a system designed to block illegally imported phones from accessing mobile networks.
The NEIR, originally scheduled to take effect on December 16, was later deferred by three months. Under the revised timeline, handsets brought into the country through illegal channels can continue to be sold until March 15, after which unregistered devices will no longer be able to connect to mobile networks.
The system is intended to formalise the handset market by requiring mobile phones to be registered before they can operate on local networks, curbing the widespread use of smuggled devices.
Khan said the prevalence of grey-market imports has meant that the government receives little or no revenue from sales of many high-end smartphones. Formalising those transactions through NEIR, even alongside tax concessions, could ultimately raise overall revenue by bringing more activity into the official economy.
“Since most high-end phones are currently coming through the grey market, we are not actually receiving any real revenue,” he said. “If we can formalise this through the implementation of NEIR, even if we forgo some revenue, total collections will still increase as transactions move into formal channels.”
At present, imported smartphones face a combined burden of import duty and value-added tax of 61.8 per cent. Locally manufactured or assembled handsets are taxed at a lower rate, with the burden ranging from 30 per cent to 35 per cent depending on the level of domestic production and assembly.
Khan said the NBR is open to providing concessions at both the import and production stages to achieve its objective of reducing handset prices while protecting local investment and consumer interests.
