Tariff raised on imported feature phones to protect local industry

Tariffs on the import of feature phones are likely to rise in the FY22 budget as the government tries to protect the local mobile phone industry.

Finance Minister AHM Mustafa Kamal proposed a hike in import tax on feature phones as he tabled the spending plan in parliament on Thursday, reports bdnews24.com.

“For the expansion of cellular phone manufacturing, assembling and backward linkage industry, I propose to make the existing concessions on raw materials of the industry more investment friendly and rational. I also propose to increase tariffs on import of feature phones to protect domestic industry,” the minister said.

“At present, most of the mobile phones sold in the local market are either manufactured or assembled in our country. In this regard, I propose extension of existing VAT exemption facility on manufacturing and assembling of mobile phones for two more years.”

Zakaria Shahid, general secretary of Bangladesh Mobile Phone Importers Association (BMPI), has lauded the decision.

“It’s a great initiative for the local industry. Though the use of smart phones has increased in Bangladesh, at least 70 per cent of customers still use feature phones, which are locally made.”

Currently, more than 35 per cent import tax is levied on imported feature phones. According to BMPI, Bangladesh has a demand for handsets worth Tk 100 billion a year.

According to the telecom regulator, 12 mobile phone factories are operating in Bangladesh since January.