The proposed duty hike will double smartphone prices, paving the way for illegal imports, said industry insiders.
Consequently, the government will suffer big revenue losses.
Bangladesh Mobile Phone Business Association (BMBA) came up with the observations at a post-budget press conference at the National Press Club in the capital on Wednesday.
“The duty hike will decrease smartphone imports through legal channels in the next fiscal year, resulting in a revenue loss of Tk2,000 crore for the government,” said Md Nizam Uddin Jitu, president of BMBA.
In the proposed budget for the 2019-20 fiscal year, the government hiked the supplementary duty from the existing 10 percent to 25 percent.
Also, 3 percent regulatory duty and 5 percent Advance Trade VAT have been imposed newly.
If this budget is passed, smartphone import taxes will go up to 57.31 percent from about 30.75 percent importers are paying currently, the BMBA leaders said.
More than nine crore internet connections are active in the country at present. Of them, about 95 percent are using internet through mobile phones.
If smartphone costs increase, it will hinder the government’s Digital Bangladesh initiative, they said.
They demanded that the government withdraw the proposed duty hike.
Under the proposed duty, smartphone prices will be doubled in the coming fiscal year, said Xiaomi’s national distributor Lt Col Syedis Saklayen.