Govt may review proposed tax on mobile handset import

The government is likely to review its proposed tax on import of mobile handsets for the fiscal year (FY) 2014-15 taking possible price hike of the widely-used device into consideration.
In the new budget announced on June 5, the Finance Minister proposed to increase the import tax on mobile handset to protect local assembling industries.
The proposed 5.0 per cent Advance Income Tax (AIT) on mobile handset import is likely to be withdrawn. Customs Duty (CD) on mobile set import might also be halved to 5.0 per cent.
Sources said the proposed 15 per cent Value Added Tax (VAT) on mobile handset import is likely to remain unchanged.    
They said increase in import tax on mobile phone is a 'sensitive issue' that may be revised further following instruction of the government high-ups.
"Some companies are assembling quality mobile phones in the country. They have to pay 15 per cent VAT at the assembling stage. On the other hand, there is only 10 per cent VAT on imports of mobile phones. This has created uneven competition between local assembling industries and imports," the Finance Minister said in his budget speech.
The National Board of Revenue (NBR) expects some Tk 5.0 billion in the upcoming FY with the proposed upward revision of import tax on mobile handset.
The country imports more than 25 million units of handset a year. Industry insiders said prices of mobile handset would increase by 20 per cent if the proposed tax measures are passed by the Parliament. Mobile handset importers will have to pay a total of 25 per cent tax at import stage as per proposed tax measures in the budget speech.
Among the other changes in customs and VAT measures, tax on ship scrap, motors of electrical fans, blade and tea might be revised downward from the proposed tax rates. Regulatory Duty (RD) may also be imposed on import of CR coil.
Officials said the proposed amendments to the Finance Bill-2014 may see further changes after arrival of the Finance Minister from abroad.