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

[DYING_S0UL]

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.

I don't think they are! NO Nope! They don't manufacture all the available flagship phones here, their capabilities are limited, and target low to mid end phone users and in some cases high ends also. But most of the times as far I have known it's the mid and low end users. Note that I did a mistake, they do not manufacture anything here. They are nowhere near manufacturing. They import the parts separately, pays 5-10% (now 5) TAX and assembles and distributes. That's just it.

As a consumers myself, I understand this much that these 9 local manufacturers are trying to manopolize this whole mobile phone industry. Again note that I am not taking sides. I or my family aren't involved with mobile phone business or anything. I am only a normal consumer who thinks, what's happening right now is wrong.]

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.

Not the whole govt but certain high offcials who are helping their rich friends getting richer while creating a toxic envirnoment for the other group (unofficial sellers). These high official thinks they can get away with anything, that they''ll demand anything and the people will listen.

[rezakurnia66]

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.

Right, adopting 43% import tax on mobile phone how to make local product keep existing behind the local citizen will priority for using local product than foreign product although have better qualities. But its not always worth it make local product of mobile phone lack competitor after high import tax for mobile phone if the Bagladesh Citizen want to buy Iphone or highest mobile phone from other countries such as Samsung.
In my country, tax import for mobile phone not really high around 20% and specific for the mobile phone has values up to $500, if you import the mobile phone under $500 you don't need to pay tax one cent yet. Its make local product will giving the best product and has good competitor.

[shinratensei_]

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.

More of trying to make the phone manufacturer to build factory there to cut down on tax fee and make it cheaper on the market while making additional money on the side with the taxes I guess.
The tax is insane and honestly tax for phone should be sitting at 10-20% maximum. Even that is already pretty high.

[AgriTrack]

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.

Smart phone is not just a communication tool, its become an essential for business. Increasing import taxes on mobile phones may reduce business activity and overall economic activity, which can negatively affect long term on economic growth. Although imposing higher taxes may provide short term revenue benefits to the government but these gains are unlikely to last at the end.

I don't think People will sacrifice this essential business tool, in such cases where inflation is high but they will must move towards substitutes. Everyone understands where these substitutes often come from, through illegal ways like smuggling. As result, the government may face serious challenges in controlling illegal trade due to this policy. what real benefit govt will get from it. Either they will hire extra people for controlling the smuggling or they earn short term benifit from import tax

[Ocham]

High tax policies also exist in my country (although I don't pay much attention to them), but at least the government is trying to develop local industries and reduce some unemployment. Corruption is another issue that should be discussed separately. In fact, corrupt officials don't care where the funds come from.

I think this is a standard policy almost everywhere in the world.

Unemployment can be reduced if the government truly wants to address it. In most countries, the unemployment rate is quite high. I think your country’s government has made the right decision. Yes, corruption is definitely a major problem, and the government should take stronger measures to combat it. At the same time, ordinary citizens should also follow all rules and regulations. Only then will corruption decrease and the country be able to progress on a larger scale.

[DYING_S0UL]

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.

More of trying to make the phone manufacturer to build factory there to cut down on tax fee and make it cheaper on the market while making additional money on the side with the taxes I guess.
The tax is insane and honestly tax for phone should be sitting at 10-20% maximum. Even that is already pretty high.

What's yours at your place?

We are already paying high tax's on every products, the rates are just absurd. Sometimes I can't help but wonder who are these people who makes these tax policies! Does they ever think about the general folks here at all? Rich influential political figures messes with the public funds and gets away with it, while we the public pays for the consequences.

[Dogedegen]

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.

Yeah these kinds of things often affect the poorest people the most negatively and those without connections and solutions. People who cheat taxes or have contacts in governments usually find ways to get around the new rules or ways to profit off of them. I never liked high import taxes on stuff like this because most modern electronics is being produced by a few countries and companies that produce the best stuff. Local industries often do not have an answer at all, not even a one that is failing bad. If they put high taxes on AMD and Intel processors what am I going to do when I can't buy anything else for my needs? All it does it take more money away from its own people and limits their own progress.

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.

I don't think that you are using the word luxury the same way that I am using it, or that it is commonly being used. That is what is causing the misunderstanding. If you are talking about it as a luxury because people can't afford it, then yes there are many places and people in the world that can't afford it but that does not mean that it is not a necessity. Think about this way, since iPhones are too expensive but a phone is a necessity these people are buying super cheap phones like $50-$100. The equivalent of that in the world of transportation is public transit like busses. Since people can't afford a car, they are using a cheaper alternative of the same thing but a means for transportation is definitely a necessity. Did I make myself clear?

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.

In most places this is not possible even if they wanted to put cyclists at an advantage. Who is going to cycle 20 to 50 kilometers in 40 Celsius scorching heat to get to their job on a daily basis?

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.

So how is your solution fair? It punishes innocent people like me and restricts my freedom to own multiple cars, because other people behave the wrong way? I do not drive my car a lot and I should pay more tax if I want to own more of them?

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!

Good example and that does not even consider really the weather. Netherlands and Denmark have pretty favorable weather for using bicycles most time of the year, some countries are simply too hot all the time. People would need to be extremely physically fit and careful to have any chance of doing this. Why would one want to risk peoples lives on a daily basis over something that causes relatively little pollution?

Denmark is at 478 cars per 1000 people, Croatia at 513, so not much difference...
Bangladesh is at 34

Bangladesh is at 34? I can't even imagine this difference. 

[stompix]

Good example and that does not even consider really the weather. Netherlands and Denmark have pretty favorable weather for using bicycles most time of the year, some countries are simply too hot all the time. People would need to be extremely physically fit and careful to have any chance of doing this. Why would one want to risk peoples lives on a daily basis over something that causes relatively little pollution?

It's not just that..
My parking garage has a higher difference in altitude than 90% of the Netherlands!
Lisbon for example, is a different beast altogether, 200 meters at some points, good luck biking that!
Also, there is the distance to work, people don't travel 50 km to work, almost nobody does, unless you're from one village really in the middle of nowhere!
Good luck biking from one side to the other of New York in the US, where 50km is treated lie nothing!

Bangladesh is at 34? I can't even imagine this difference. 

Yeah, better not! I don't know what would happen in those countries if they had ten times the cars they right now have!
I've been in a few Asian countries where they have 1/4 of the cars we have and the traffic is a like a civil war happening, I don;t even want to imagine how it would look!

[Nanga Parbat]

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.

Before increasing the rates of absolutely everything one should  whether the poor can afford the rate like the tax on mobile phones.Nowadays everyone wants to have a mobile phone but due to the tax on it the price of the mobile phone increase so much that they will think twice before buying it.But the rich people do not make tax such a big issue because they get tax exemptions or facilities in some way or the other that why the poor and middle class people are deprived of the development.If they use the installment method a lot of money is wasted.In my opinion the tax and the price of mobile phones should be kept at the local level.

[abhiseshakana]

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.

Smart phone is not just a communication tool, its become an essential for business. Increasing import taxes on mobile phones may reduce business activity and overall economic activity, which can negatively affect long term on economic growth. Although imposing higher taxes may provide short term revenue benefits to the government but these gains are unlikely to last at the end.

I don't think People will sacrifice this essential business tool, in such cases where inflation is high but they will must move towards substitutes. Everyone understands where these substitutes often come from, through illegal ways like smuggling. As result, the government may face serious challenges in controlling illegal trade due to this policy. what real benefit govt will get from it. Either they will hire extra people for controlling the smuggling or they earn short term benifit from import tax

Based on my knowledge, higher taxes applied for importing goods with purpose for increase revenue, decrease smuggling and illegal import, Protect domestic industry or push local industry to grow and balancing country foreign exchange reserves. In my country for buying or bringing in mobile phone, we must pay import duty and taxes around 22%. If it purpose for domestic industry protection or for country revenue, 43% i think it still makes sense. Besides that i found news that previously Bangladesh government applied higher numbers, with the reduction its mean government make adjustment on fiscal policy so consumen can purchase mobile phone on reasonable price and country get significant stable revenue.

But this kind of policy will be success based on it implementation, if government weak and full of corruption then we can say that this policy purpose is deliberately open the door for corruption or send invitation for smuggler. High import duty and taxes always followed by illegal import, black market and moral degradation of tax obedient. Even as a matter of fact such kind of policy can faster increase country revenue on the report, acceptable reason for public acceptance and no need structural reformation, which we can say short term target fullfilled

[Mate2237]

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Based on my knowledge, higher taxes applied for importing goods with purpose for increase revenue, decrease smuggling and illegal import, Protect domestic industry or push local industry to grow and balancing country foreign exchange reserves. In my country for buying or bringing in mobile phone, we must pay import duty and taxes around 22%. If it purpose for domestic industry protection or for country revenue, 43% i think it still makes sense. Besides that i found news that previously Bangladesh government applied higher numbers, with the reduction its mean government make adjustment on fiscal policy so consumen can purchase mobile phone on reasonable price and country get significant stable revenue.

But this kind of policy will be success based on it implementation, if government weak and full of corruption then we can say that this policy purpose is deliberately open the door for corruption or send invitation for smuggler. High import duty and taxes always followed by illegal import, black market and moral degradation of tax obedient. Even as a matter of fact such kind of policy can faster increase country revenue on the report, acceptable reason for public acceptance and no need structural reformation, which we can say short term target fullfilled

]No government of the world will allow foreign goods to flood their country This will impact negatively on the local market and economy so governments all over the world has a way of trying to bring a balance in the importation of foreign goods to the nation. And putting a heavy fine is one of those means through which giver can sanitize the the importations of foreign goods. If government don't come up with these types of mechanisms foreign goods will take over the local market.



It's only developing countries such as African nations that has allowed foreign goods to take over there market making their industries is getting weaker this has killed local industries making things making these nations to depend heavily on foreign import.

[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.

It's not logical at all, but you just have to look at how arguably the most powerful man in the world - Trump - is acting right now to see similar dumbass actions. These politicians are so far disconnected from the problems of the average person, because they sit in ivory towers and would never have to worry about money again even if they lived for a thousand years. These sort of market manipulations make good sound bites for politicians "we protect local jobs" but what they really do is make it harder for locals to get access to great technology they could use to compete in completely different fields. There will be specialties that Bangladesh can get a competitive cost advantage in, but tech definitely is not one of them - it simply does not have the proper supply chains and economies of scale needed to compete like that.

[DYING_S0UL]

It's not logical at all, but you just have to look at how arguably the most powerful man in the world - Trump - is acting right now to see similar dumbass actions. These politicians are so far disconnected from the problems of the average person, because they sit in ivory towers and would never have to worry about money again even if they lived for a thousand years. These sort of market manipulations make good sound bites for politicians "we protect local jobs" but what they really do is make it harder for locals to get access to great technology they could use to compete in completely different fields. There will be specialties that Bangladesh can get a competitive cost advantage in, but tech definitely is not one of them - it simply does not have the proper supply chains and economies of scale needed to compete like that.

I mean nobody is against the "protecting the local jobs" initiative. These 9 companies are creating jobs which I support. But I don't support the fact that the govt is supporting one local group while suffocating the other half. They, too, belong in this local job circle. A more peaceful, sensible solution/agreement could have been made, like gentlemen sitting & discussing the possible challenges. But no! They didn't think of any of that, didn't take public opinion, forcing a policy that most of us disagree/dislikes with.

Imagine, you are in a remote place with only one person, and ran out of batteries and needed to make an emergency call. So you insert your sim on that other persons phone. But no, with the implementation of NEIR system, if the IMEI's of your phone and the sim you were inserting doesn't match (by match I meant, the IMEI's must needs to be registered under that person's NID aka National Identification Documents), otherwise you won't get network. This is the process I understood so far!

If you buy an official phone with high tax, insert your sims, it gets registered under that SIMs owner automatically. But if it's an unofficial one, or imagine your bought if while traveling abroad, or bought one as gift, it will be labeled as illegal at first. And the process to make it legal is kinda hassle. You need to show documents, this one that one, and a lot of things that I rather not discuss it here. The point is they made it very complicated.