1% surcharge imposed on mobile phone handsets import

NBR sources said the finance minister discussed with them about the issue as he decided to introduce the surcharge on the price of imported and locally manufactured mobile handsets
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The government has imposed 1% surcharge on the price of imported and locally manufactured mobile phone handsets as the parliament yesterday passed the Finance Bill 2014.

This is for the first time such surcharge was imposed under the name of Information and Communication Technology development fund.

Before passing the bill, Whip Md Shahiduzzaman Sarker placed a correction on the bill about imposing the surcharge for creating a Information and Communication Technology development fund.

According to the parliamentary document, National Board of Revenue (NBR) will gazette it and formulate a guideline about the procedure.

Before passing the bill, Prime Minister Sheikh Hasina and Finance Minister AMA Muhith had created confusions over the surcharge.

Prime Minister Sheikh Hasina in her speech said, “Finance Minister can impose surcharge on mobile phone uses. And funds raised from this surcharge will be spent on education and health.”

The prime minister also requested the finance minister to reduce VAT on handsets as she thinks it is much higher and will create a burden for the consumers.

However, NBR sources said the finance minister discussed with them about the issue as he decided to introduce the surcharge on the price of imported and locally manufactured mobile handsets.

The finance minister had also proposed 2% surcharge on mobile phone uses in the budget proposal for 2012-13, but cancelled amid huge criticism.

A parliamentary standing committee on Post and Telecommunication Ministry last year also recommended surcharge for building the Padman Bridge on own costs, but government did not accept it.

Taking part in the budget discussion, Sheikh Hasina said the import tax on mobiles were somewhat higher. She said: “You (Muhith) may consider reducing tax on import of mobile phones.”

In his speech Muhith proposed to reduce 5% import duties from existing 10% and fully withdraw 5% advance income tax (AIT) as he had proposed for the fiscal 2014-15.

He, however, did not mention anything about the proposed 15% VAT on the handsets that implies it is being imposed in the next fiscal.

Before passing the budget, prices of various mobile phone handsets have already witnessed an upward trend in the retail markets across the country, marking sharp rise at a range between 10% and 16%.

Industry insiders said the measure might cause increasing smuggling of handsets and losing revenue.

Source: Dhaka Tribune

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