Number of days of computers imported duty free
File photo: A woman looking for a laptop to buy is seen in the photo taken at a market in Dhaka
Syed Zakir Hossain / Dhaka Tribune
No duty or tax on computers and parts imported since fiscal year 1998-99
There is finally going to be a big slap in the face of imported computers and their parts, after years of pleading by local producers, who will benefit greatly from this decision.
The move should discourage imports and make Bangladesh solvent in the manufacture of computers, experts say.
The government has been considering the decision for a few years, but this year, sources say, it could finally see the light of day.
If this proposal is adopted in the next national budget for the 2021-2022 fiscal year, importers will have to pay high tariffs on computer products and spare parts, which were not in the tariff schedule. On the other hand, if the computers are produced locally, the tax will be lower.
According to sources, a proposal was sent to the Ministry of Finance and the National Revenue Council (NBR) ahead of the budget for the development of the local IT industry.
He mentioned three categories for IT production in the country.
In the proposal, the first category concerns manufacturers. Those who produce computers and spare parts locally will receive maximum benefits and incentives through duties and taxes.
Second, computer assemblers will also benefit from tax exemptions, but less. A tax of around 4 to 5% has been proposed in the proposal.
To discourage imports, it has been proposed to impose significant tariffs on imports. This rate is around 30 to 32%.
If this tax is imposed, the price of imported PCs and laptops will rise dramatically and tech aficionados will have to purchase computers at higher prices.
Stakeholders are looking for more time
According to the Bangladesh Computer Council (BCC), computers and spare parts should be returned duty free. This has been demanded by people in the industry since 1996. This demand is growing stronger day by day from different sides.
During fiscal year 1998-99, import duties on computer products were removed. Since then, this sector has been exempt from duties and taxes.
A sudden move to impose duties on computer and computer parts will have a detrimental effect on the market in Bangladesh, importers say.
If there is no duty-free incentive in the upcoming budget and if the readiness of local manufacturers is not completed quickly, the sudden surge in computer prices could be too much for customers.
It could lead to a big disaster in the industry, said an official at Taiwanese IT brand Asus.
Nafis Imtiaz, marketing director of Asus in Bangladesh, said that if the import duty were imposed on computers and computer parts, then there would be a big impact on the market, “because the manufacturing process of computers locally is still a long way to go. “
He cited the import duty last imposed on cellphones, which pushed up smartphone prices. He is still in shock from its effects.
“This can also happen in the case of computers and spare parts,” added Imtiaz.
Currently, the country’s IT market depends on imports.
No one can create world-class brands locally overnight. It will take time, he observes.
Ultimately, consumers will have to shell out more money on computers if the duty is imposed.
Everyone should take the reality into account and realize that the manufacturing of local computers would need time to evolve, before import duties are imposed. “It won’t take more than a year or two. There is also an issue of cost and raw materials for production, ”said Asus chief marketing officer.
Saidur Rahman, product manager of Ryans Computers – a large IT chain, said they also did not want import duties to be imposed as it would hurt their business.
However, it is possible to appeal this decision if the duty is imposed on computers and spare parts, according to the BCC.
“Are we going to depend only on imports? We told everyone earlier to improve local production. But a tax should be imposed on local manufacturing with leniency,” said Tarique M Barkatullah, director (operations and safety CA) and Director (Data Center) of the BCC.
“However, we still have not obtained any authentic information on this matter. As it has not yet been presented in the next budget, so we do not want to talk about it at the moment,” he added. .
Incidentally, local home appliance giant Walton has set up a computer manufacturing plant.
Desktops and laptops are produced in this factory and are also exported to at least five countries around the world.
What about cell phones?
Today, phones are produced in 10 to 12 approved factories around the country, although 14 companies have received certificates for their factories.
At least two other institutions are waiting to obtain the certificates. Locally assembled phones meet over 82% of Bangladesh’s total mobile phone demand.
Samsung has set up a factory in Bangladesh to produce cell phones, smart TVs, refrigerators and many other things except laptops and desktops.
But their factory also has the infrastructure to make computers.
Post and Telecommunications Minister Mustafa Jabbar said if low tariffs and taxes were imposed on locally produced computers and related products, he would be able to meet the country’s growing demand.
“The duty will only be imposed on imported computers, not on spare parts. We try to keep spare parts duty free, ”the minister said.
Previously, Mustafa Jabbar had protested against the tariff and the tax.
Now, its willingness to impose import duties proves the country’s ability to manufacture and assemble computers.
“We are now exporting cell phones. If we have the production capacity, the cost will be reduced by 15% to 20%, and we can also export Bangladeshi computers. Job creation will also increase, ”added the Minister.