Tax break extended for local mobile phone makers

Additional 2pc surcharge on imported ones

Staff Correspondent | Published: 00:05, Jun 08,2018 | Updated: 23:51, Jun 07,2018

 
 

A file photo shows people checking features of mobile phones at a showroom of a local company in Dhaka. Finance minister AMA Muhith on Thursday proposed imposing 2 per cent surcharge on imports of mobile handset and reducing import duty on raw materials for handset manufacturing in the national budget for 2018-19 fiscal. — New Age photo

Finance minister AMA Muhith on Thursday proposed imposing 2 per cent surcharge on imports of mobile handset and
reducing import duty on raw materials for handset manufacturing in the national budget for 2018-19 fiscal.
In line with last year’s budget policy promoting local manufacturing of handsets, the government also exempted value-added tax and surcharge for manufacturing handsets locally.
Under the proposed rate of import duty, 40 kinds of raw materials for manufacturing handsets will be subject to just 1 per cent surcharge instead of existing 5-25 per cent of such taxation.
In the outgoing 2017-18 fiscal, the government increased customs duty on imports of mobile handset to 10 per cent from 5 per cent. Despite the imposition of import duty, imports of the handsets rose 9.6 per cent to 3.4 crore units in 2017 due to growing demand.
Although imposition of import duty was to encourage local manufacturing, most of the country’s handset demands are stilled fulfilled with imported ones.
As a result of imposition of 2 per cent surcharge, mobile phone handset will become a bit costlier.
Finance minister in the budget speech said, ‘Mobile phone has a very important role to play in spreading information technology-enabled services.’
In order to help the mobile manufacturing industry to flourish and attract investment in the sector, Muhith suggested issuing a separate statutory regulatory order allowing the value-added tax exemption facility on mobile telephone set manufacturing.
The duty benefits on some raw materials and parts prompted some local entities to start manufacturing in the country.
To expedite and expand IT and computer use, the finance minister also suggested reducing import duties of some software which are not developed in Bangladesh and productivity software in any form to 5 per cent. 

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