43.3% Import Tax on Mobile Phone! How Logical is this?

[tabas]

I'm surprised that there are locally assembled mobile phones in Bangladesh. Maybe the locally assembled mobile phones will become better than the imported ones after several years. I can see the logic behind those high import tariffs, but sometimes protectionism simply doesn't work.
If I was a citizen of Bangladesh, I wouldn't mind high import tariffs, if there was a good enough local mobile phone production. The government is trying to create more jobs for the people in Bangladesh, but the industrial policies must include more measures than just high import tariffs.

I think it should be supported by the locals so that it will also push the imported phones to go lower if they'll be flooded by supplies that no one wants it because they're expensive. The effect is at the beginning of it when they're just newly implemented and even if I am a local, I'd support locally made as long as they're durable, and proven to be quality made. It's a way for the locals to protest to support what's locally made and if can't boycott the imported ones, they should opt for what's their own.

[Fortify]

The title implies the subject. I would like to know your opinion, what do you all think? Do you guys have this much TAX on mobile devices in your places?

To sum up, recently the tax for imported mobile devices were reduced to 43.3% here at Bangladesh. Previously it was 61%. Can you imagine how high it was? You are paying almost more than half of the original price on TAX. While a locally manufactured (not manufactured, rather assembled) device has only 5% TAX (previously 10%). Do you think it's fair to have this level of difference margin? This is one of the reasons we have a "grey market" here, where retailers sell what is known as unofficial phones. Phones for which TAX wasn't given. But there is a catch to it. By default when you are traveling from abroad, you are allowed to bring 3 devices duty free afaik (1 your personal, 2 new). With this and many other legal channels, these phones enter our market. And to be honest, I don't believe these people want to bypass TAX or anything, the system forced them, made it unbearable with this much TAX, not to mention the official process of importing phones here is very complicated. Even if they wanted to legally, they cannot, the current rule only favors the official brands. We are already paying a high TAXs on everything, the economy here is bad, and as a consumer myself, I am not in any position to buy my dream phone with a burden this high. Personally, if I could find the device that I want in the official marketplace, I would buy it. But these assembly lines aren't capable enough. The model they (official) supply aren't good enough for me. Imagine you wanna buy a flagship level phone but the model never got officially launched here, you simply cannot. You have to go to the unofficial marketplace.

These sort of policies are often enacted when a politician is trying to act tough and chase populist rhetoric in order to get elected, because stupid people lap up the "dey takin our jerbs" type campaigning which is usually associated to it. There are some legitimate reasons for protectionism of certain industries, but it has to be done in a very tailored and well thought out way - knowing that it can change over time. This would not be one of those cases because Bangladesh simply cannot compete in the area of advanced mobile technology with the very high population and much more technologically advanced countries around them. If for no other reason than economies of scale will always be available to these other countries which will offer cost efficiencies that cannot be matched. It's better to focus these taxes on specific areas that Bangladesh has a chance of beating much larger players.

[shield132]

IMO, if the govt reduced the TAX to a bearable amount like 15-20% and made the importation process less complicated, it would create a healthy market.

20% is still a high import tax on smartphones to my mind, because such a tariff exists in my country and lots of people try to avoid paying it. Lots of them have someone in a foreign country who buys a smartphone, puts a false invoice and ships to the homeland. Many of them have even partnered with foreign sellers and follow the same approach. It's an easy way to make at least 10% net profit when there is a 20% tax on smartphone imports. Lots of people buy expensive iPhones in my country, so no do the math. It's a nice extra income besides your job.
I believe that a 10% import tax is the best tax rate. It's not worth wasting time looking for alternatives when you only have to pay 10% extra. This will bring more money in the budget to my mind, because people won't import and buy locally from businesses that work on smartphone importation to then sell locally.

[AbuBhakar]

Interesting topic. I had to check some import taxes here in Serbia, and I couldn't find any reliable info... It's min 20%, like on pretty much everything else, but some people mentioned 32%. In any case, I have an interesting story from a week or two ago. My friend wanted to buy an iPhone 15 256 GB. In Russia, it's around $700... in Serbia, it's around $1200. That speaks for itself... we are paying a lot more for the same things... and we have lower salaries and overall standard. It's pretty crazy.

The price of that is almost double, which is very expensive compared to the original price in other countries. The government is really resourceful when it comes to taxes because they know that almost everyone has a mobile phone, so they made this a way to collect more taxes. Fortunately, here in our country, the taxes are not that high when it comes to mobile phones. But they have other ways to collect taxes that are also very difficult. It would be good if the taxes collected went to the right people and not just pocketed by politicians. It's a shame to pay so much tax and then find out that those in power are just stealing it.

[Lucius]

~snip~
For example, afaik, Vivo x200 ultra cannot be found on Vivo's official site in BD. You will only see their base variant, not ultra. So again, you have to go to the 3rd party retailers. But now with unofficial gone, I don't see how you can buy the ultra varient. I mean vivo, oficially isn't providing it here. You see the issue? CMIIW.

If you really want that smartphone I'm sure you can find a way to buy it - but from what I see the price is around $1000 and I wonder if you can afford it? I know that there are online sites that even sell Chinese versions of phones that are slightly cheaper than the global versions, so it's not a problem to buy something that's not available in your market.

As for the logic behind why a tax is lower or higher, there are always some interests at stake, whether it's the state or a lobby that wants to ensure that its products sell better than the competition.

[mindrust]

That's nothing. Check out Turkish taxes on mobile phones.

For example, iPhone 17 Pro Max 256 GB prices:
USA sale price: $1294
Türkiye sale price: 120.000 TL ($2790)
Source

We call this buying one phone for yourself and one phone for the state. The situation is much more serious with cars. When you buy one car for yourself, you pay taxes equal to the price of 2 cars. Unfortunately, there is almost no tax awareness among the public and there is a large base that approves everything the government does. For this reason, no matter how much we oppose it nothing changes.

What the f*ck!!!
I mean why!!! What could possibly make the government go this extent. This is just broad daylight robbery. It makes absolutely no sense for me to me buy with this amount. I would rather use a 2nd hand broken device than pay this shit.

...

Nobody pays that tax (in Turkey) unless they are retarded. At this point buying 2 phones and using them without registering is cheaper since they let you use the phone for 4 months without registering...

Want me to really blow your mind?

We pay roughly 30 usd to the government as tax every time we leave the country for whatever reason. Welcome to Turkey, worst place to be a citizen, best place to be a foreigner.

[WillyAp]

I asked chatgpt and this is what I found. And as it seems, Bangladesh ranks no 1 on the highest TAX rate, despite reducing it recently. LOL, that's just hilarious, a complete joke.  

Go to the store who sells phones and ask how much they cost is much more reliable than a ChatgPt prompt.
If you wish for Iphones, there are better phones like Ulefone who last at least 5 years.

[stompix]

That's nothing. Check out Turkish taxes on mobile phones.

For example, iPhone 17 Pro Max 256 GB prices:
USA sale price: $1294
Türkiye sale price: 120.000 TL ($2790)
Source

We call this buying one phone for yourself and one phone for the state. The situation is much more serious with cars. When you buy one car for yourself, you pay taxes equal to the price of 2 cars. Unfortunately, there is almost no tax awareness among the public and there is a large base that approves everything the government does. For this reason, no matter how much we oppose it nothing changes.

What the f*ck!!!
I mean why!!! What could possibly make the government go this extent. This is just broad daylight robbery. It makes absolutely no sense for me to me buy with this amount. I would rather use a 2nd hand broken device than pay this shit.

You think that is bad? Let me tell you how much you pay for a car in Denmark

25% on the value up to DKK 72,900.
85% on the value between DKK 72,900 and DKK 226,500.
150% on the value above DKK 226,500.

To make things easier just think of it at 0.10 (rate is 0.13) euros...

So given a 50k car, you first pay  25% VAT, so 12 500 euros!
Now that tax above is on price plus Vat, so you have
-25% for the first 7000 euros, that's 1,800 euros
-85% on the 7000 to 22 500 euros 13,000 euros
-150% on the remaining 28,500 euros, 42,750 euros

So for a 50k car you pay 12,500+1,800,+13,000+42,750 > 70 000 euros in taxes!

Also:
https://data.worldhappiness.report/country/DNK
Denmark Rank: 2 |

[mindrust]

That's nothing. Check out Turkish taxes on mobile phones.

For example, iPhone 17 Pro Max 256 GB prices:
USA sale price: $1294
Türkiye sale price: 120.000 TL ($2790)
Source

We call this buying one phone for yourself and one phone for the state. The situation is much more serious with cars. When you buy one car for yourself, you pay taxes equal to the price of 2 cars. Unfortunately, there is almost no tax awareness among the public and there is a large base that approves everything the government does. For this reason, no matter how much we oppose it nothing changes.

What the f*ck!!!
I mean why!!! What could possibly make the government go this extent. This is just broad daylight robbery. It makes absolutely no sense for me to me buy with this amount. I would rather use a 2nd hand broken device than pay this shit.

You think that is bad? Let me tell you how much you pay for a car in Denmark

25% on the value up to DKK 72,900.
85% on the value between DKK 72,900 and DKK 226,500.
150% on the value above DKK 226,500.

To make things easier just think of it at 0.10 (rate is 0.13) euros...

So given a 50k car, you first pay  25% VAT, so 12 500 euros!
Now that tax above is on price plus Vat, so you have
-25% for the first 7000 euros, that's 1,800 euros
-85% on the 7000 to 22 500 euros 13,000 euros
-150% on the remaining 28,500 euros, 42,750 euros

So for a 50k car you pay 12,500+1,800,+13,000+42,750 > 70 000 euros in taxes!

Also:
https://data.worldhappiness.report/country/DNK
Denmark Rank: 2 |

What are you whining about exactly, you are living in the second most happiest country in the world. Don't let some tax get in the way of your happiness. Pay your taxes and get on with it. It seems Danish government is using them taxes properly.

[DYING_S0UL]

Going through your post what I see is the government of Bangladesh trying trying to discourage import which is detrimental to the local economy, so I don't see any thing wrong with what your government is doing.

By suffocating a group of people in order to help another group monopolize a certain industry? You didn't get the whole picture, mate. As a consumer myself, I know what actually is the reason for such harsh action. What they are doing is wrong. You may think these are just small time business owners, but they are, as far as I know, are the ones that make up the bigger portion of the mobile phone industry here. These guys are protesting peacefully for a solution. But some high ranked officials are determined to defame them, favoring the other party (money is involved). You cannot just expect to make up a policy and order the shutdown of this chain and not have issues. This is much bigger than you can imagine.

Buy a well maintained 2nd hand Phone.
Or buy the parts of a phone and arm the phone yourself.

Or might as well buy a pocket router.
I would rather buy an unofficial phone with no sim connection than buy official low end devices.

But the tax you are charged in Bangladesh, both the current one and the previous one, is also absurd. I don't know why, but I thought it would be lower, given the proximity to the main exporters and manufacturers. I had the idea that it was expensive here, not only because of taxes, but also because of the shipping cost and the distance.

I have no idea why the gap is this much. This seems like discrimination to me.
If you import, you need to pay 43-61% TAX.
If you import parts seperately, and assemble it here, you only pay 5-10% TAX.

How is that fair?

I think it should be supported by the locals so that it will also push the imported phones to go lower if they'll be flooded by supplies that no one wants it because they're expensive. The effect is at the beginning of it when they're just newly implemented and even if I am a local, I'd support locally made as long as they're durable, and proven to be quality made. It's a way for the locals to protest to support what's locally made and if can't boycott the imported ones, they should opt for what's their own.

Do you believe these unofficial phone sellers are doing anything illegal? They have been in this business for years, decades. If it really were illegal or anything, they would have perished long ago. They are doing this because the law allowed them to. And now all of a sudden, how can you call these people illegal and boycott them?

I believe that a 10% import tax is the best tax rate. It's not worth wasting time looking for alternatives when you only have to pay 10% extra. This will bring more money in the budget to my mind

Exactly! In fact the people are protesting for fair TAX and easy import policies from the very beginning.

If you really want that smartphone I'm sure you can find a way to buy it - but from what I see the price is around $1000 and I wonder if you can afford it? I know that there are online sites that even sell Chinese versions of phones that are slightly cheaper than the global versions, so it's not a problem to buy something that's not available in your market.

Vivo x300 Pro. I can buy it from unofficial market. But buying isn't the issue. The govt implimented a buggyy/shitty/half cooked/completely trash NEIR system. With that the devices that weren't active before January 1, won't be able to use the network. Previously, they assured the mobile business owners that they will be given a 3 month grace period to sort out these already stocked phones, but they broke that promise and launched it on Jan 1. Later they said, all unofficial phone will still be able to use sim's network for 90 days, but what happens after 90 days, nobody knows clearly.

Nobody pays that tax unless they are retarded. At this point buying 2 phones and using them without registering is cheaper since they let you use the phone for 4 months without registering...

I won't! We are already paying high tax on everything. Now you are saying I have to pay 43% tax on mobile? Nope! I would rather use a pocket router.

You think that is bad? Let me tell you how much you pay for a car in Denmark

I personally consider cars to be a luxury item. Not everyone can afford one, and the rich have enough to pay such enormous taxes. It shouldn't be a problem for the elite class.
But smartphones, that's one of the most basic needs nowadays. Can't compromise there...



Ignore typos and mistakes, it took me quite some time to read and reply each of you.

[DPHOR]

That's nothing. Check out Turkish taxes on mobile phones.

For example, iPhone 17 Pro Max 256 GB prices:
USA sale price: $1294
Türkiye sale price: 120.000 TL ($2790)
Source

We call this buying one phone for yourself and one phone for the state. The situation is much more serious with cars. When you buy one car for yourself, you pay taxes equal to the price of 2 cars. Unfortunately, there is almost no tax awareness among the public and there is a large base that approves everything the government does. For this reason, no matter how much we oppose it nothing changes.

This is very weird to be sincere..
This doesn't applies in my country and if you purchase a brand new phone, you have no tax to pay, and even though you have new car today in my country you wouldn't be tax, but what amount that goes into your account, by the ending of year or month there would be certain percentage that would be deducted from your account. Although this is just a new law that was passed across this January by CBN Federal Government.

[retreat]

Just like in my country, here the tax on imported goods is quite burdensome, even though my country is not included in one of the countries with such high import taxes, it can still be said to be a bit ridiculous. Even though the government reasons that they impose such a tax to protect domestic industry and encourage local production, it still seems a bit unreasonable to me, because I still cannot trust domestic production - and especially not all goods are produced domestically. So many people are forced to pay the import tax, while others choose to use dirty methods by going through back channels, bribing customs, and that way maybe you can get a more reasonable price, but it is more risky.

[Dogedegen]

Taxes like this are completely unjust, it shows malicious intent by those who have the powers. Some people here can make relativistic comparisons and say that it is not as bad as somewhere else, but that kinda misses the point. It should not be like this anywhere. When taxes are done right, they can be a good thing. They can be used for example to persuade people to behave in ways that are beneficial for them and for the country. You can incentivize certain behaviors such as buying electric vehicles by reducing the taxes on them. In your personal case with the phones you are absolutely right. What probably happened here is that the local industry group colluded together and bribed the relevant parties that have power to enact such laws. This happens very frequently but people refuse to believe this because it can shatter their positive worldview.

What are you whining about exactly, you are living in the second most happiest country in the world. Don't let some tax get in the way of your happiness. Pay your taxes and get on with it. It seems Danish government is using them taxes properly.

I don't think that high taxes are not related to the happiness index of a country. If it shows anything is that the taxes are used in an inefficient way and that a lot of them are being stolen. It is very fair to complain, I would find ways to avoid these taxes like the rich do. Each country has its own specific rules for every issue. People need to look in detail and they may find an answer that will help them.

I personally consider cars to be a luxury item. Not everyone can afford one, and the rich have enough to pay such enormous taxes. It shouldn't be a problem for the elite class.
But smartphones, that's one of the most basic needs nowadays. Can't compromise there...

I would like to point out that this is a mistake and that you should consider changing your view. It really depends a lot on where you live. Cars are a necessity for many places in the world and it would not even be possible to accept many jobs without a car. Many places have bad public transport or do not have any at all depending on where you live and where your job is. What should one do in this case? Please do not group together basic cars with medium prices or luxury cars, these are not the same. Basic cars can be considered a necessity like a basic smartphone, but having the latest iPhone is not a necessity that is a luxury.

[DYING_S0UL]

What probably happened here is that the local industry group colluded together and bribed the relevant parties that have power to enact such laws. This happens very frequently but people refuse to believe this because it can shatter their positive worldview.

Yup, you hit the right spot. This is exactly what is happening right now. Nobody is against this TAX or verification system or anything. They are against the discrimination and unfair policies favouring a certain group, while they go bankrupt or out of business. The current import policy is kinda complex and as for the tax, as u can see, it's quite absurd. In fact, because of this, the govt is losing more money on taxes. These small owners are using other means to avoid taxes. Again, this seems like a wrong thing to do, but the way these unofficial phones enter our domain is kinda valid, they are within the system, afaik. A person is allowed to bring 2 smartphones duty free. So you see, the govt already paved the way for this, so if you start calling these unofficial phones illegal? I mean, that's then ridiculous.

But but but, if the tax were reduced to a fair amount and the importation policies made a little easy and flexible, I believe the govt would earn more than what it is losing right now.

I would like to point out that this is a mistake and that you should consider changing your view. It really depends a lot on where you live. Cars are a necessity for many places in the world and it would not even be possible to accept many jobs without a car. Many places have bad public transport or do not have any at all depending on where you live and where your job is. What should one do in this case? Please do not group together basic cars with medium prices or luxury cars, these are not the same. Basic cars can be considered a necessity like a basic smartphone, but having the latest iPhone is not a necessity that is a luxury.

What I said above is nothing but truth, at least for where I am located. For the general mass, having the lowest basic cars can be a dream, most of the times. I know so many people around me! And how many have I seen owning a car? Lets just consider a 2nd hand! None! Yeah, many of us owns motorcycle but owning a car is an expensive dream here. Btw, nobody is talking about buying iphones or anything.

[Lucius]

~snip~
So for a 50k car you pay 12,500+1,800,+13,000+42,750 > 70 000 euros in taxes!
Also:
https://data.worldhappiness.report/country/DNK
Denmark Rank: 2 |

I heard that about 70% of people in Denmark use bicycles anyway, so they don't care about such a tax, right? They generally say that Denmark is the only country where cyclists have a greater advantage than cars, and when you look at it, it's not so bad considering that the air quality is certainly better than in other European countries.

I wouldn't mind if such a tax were in place in other countries, because people used to have one car per family, today every family member has their own car - and then they wonder why the air is polluted and why it takes them an hour or two to get to work and back.

[Porfirii]

I think that such taxes are definitely abusive and even confiscatory.

In Spain Value-added taxes are 21%. Although it is true that due to the currency exchange rate and manufacturers deciding to raise prices in Europe we pay much more than Americans for our mobile phones, the taxes mentioned in the OP and others in this thread (up to 100% in Brazil??) are outside any reasonable limits.

At least in Bangladesh it was lowered from the out of all common sense over 61% to a more reasonable but still abusive 43.3%. It is progress, but there is still a lot of room for improvement.

[stompix]

~snip~
So for a 50k car you pay 12,500+1,800,+13,000+42,750 > 70 000 euros in taxes!
Also:
https://data.worldhappiness.report/country/DNK
Denmark Rank: 2 |

I heard that about 70% of people in Denmark use bicycles anyway, so they don't care about such a tax, right? They generally say that Denmark is the only country where cyclists have a greater advantage than cars, and when you look at it, it's not so bad considering that the air quality is certainly better than in other European countries.

That's one side of the story, same with the Netherlands...
Is your commute under 5 km, 50% of people would use bikes, is your commute is over 10km, it drops to 10%, make it 20km and nobody does it!
Denmark is at 478 cars per 1000 people, Croatia at 513, so not much difference...
Bangladesh is at 34

I personally consider cars to be a luxury item. Not everyone can afford one, and the rich have enough to pay such enormous taxes. It shouldn't be a problem for the elite class.
But smartphones, that's one of the most basic needs nowadays. Can't compromise there...

Lol, yeah...no!
Plenty of people would be out of a job if they did not have a car, smartphones are nowhere near that!
Cars have been built in the economy for a century, plenty of people would actually die without one, 90% of smartphones are used to get the latest gossip.

Sorry, but I see a 1000 euros smartphone as luxury, I don't see a 60k A6 as such!

[DYING_S0UL]

I think that such taxes are definitely abusive and even confiscatory.

In Spain Value-added taxes are 21%. Although it is true that due to the currency exchange rate and manufacturers deciding to raise prices in Europe we pay much more than Americans for our mobile phones, the taxes mentioned in the OP and others in this thread (up to 100% in Brazil??) are outside any reasonable limits.

At least in Bangladesh it was lowered from the out of all common sense over 61% to a more reasonable but still abusive 43.3%. It is progress, but there is still a lot of room for improvement.

I believe because of this absurd amount of taxes, sellers are forced to use alternative ways, bypassing taxes, and the people are also trying to buy at a cheaper rate. As a result, the government is losing more on tax. But if it were lowered to a favorable amount, these small owners would actually follow the legal way (they already are by using the system's loopholes), contributing to greater tax collection.

Lol, yeah...no!
Plenty of people would be out of a job if they did not have a car, smartphones are nowhere near that!
Cars have been built in the economy for a century, plenty of people would actually die without one, 90% of smartphones are used to get the latest gossip.

Sorry, but I see a 1000 euros smartphone as luxury, I don't see a 60k A6 as such!

I guess that's true, but again plenty of people like me are using public transportation for their every day work. It's around 20km 1hour bus journey everyday for me.

It is, not denying that. 1000 euro is a massive amount here. As for myself, my device only costs like 230-250 USD. It's decent enough for me.

[Hispo]

In my opinion this does not make any sense, unless Bangladesh is an important manufacturer of phones and wanted to kept their national industry alive, by keeping international competition away.
But since most phones are manufactured in China, I assume this is nothing but some cash grab by the government of Bangladesh, they know all their citizens will eventually renew their phones and they do not want to lose any chance to profit from it...

The fact they previous tax was over 61 percent is insane to me.

[Oluwa-btc]

Smart phones are a very important tool for everyone these days and the government gets a huge tax from them but it should never be more than 20%. The issue that op has mentioned here is that a huge tax is being imposed. This will create more confusion among the people of this country and people will think more about tax evasion. Because when you have to buy a mobile device with such a high tax, the price of that device will automatically increase a lot which is a injustice for the people of that country.

Could this be a deliberate acts by the government of that country to put a high tax rates on mobile devices while they enjoy free privileges and opportunities. I think the percentage of tax is way too high have they ever thought of the citizens that tends not to afford such devices at that very rates. There should be a means to turn this down and reduce the high rates so every citizens can have access.