Higher duty may to be levied on computer imports to promote local industry
The forthcoming budget may slap higher duty on imported computers and its spare parts after years of pleading by the local producers for such measure to give protection to local manufacturing. Such imports were so far enjoying lower duty or duty free imports.
The move is set to discourage import and make Bangladesh solvent in computer manufacturing, industry sources said. The government was contemplating such step for the last few years, but it is coming to happen this year's budget, NBR sources early this week said.
If this proposal passed through in national budget for 2021-22, importers will have to pay high tariffs on computer products and spare parts. On the other hand, computers produced locally will subject to lower tax.
According to sources, the industry leader sent a proposal to the Ministry of Finance and National Board of Revenue (NBR) pleading such measure in the new budget. It demanded tax benefit for three categories of computer products.
The first category refer to manufacturers. Those who will produce computers and spare parts locally will be given maximum benefits and incentives through duty and tax.
Secondly, the computers assemblers also should get tax exemptions, but less. About 4-5 percent tax has been proposed. To discourage imports, large tariffs have been proposed on imports. This rate is about 30-32 percent.
If this tax is imposed, price of imported PCs and laptops will go up significantly, and the tech aficionados will have to buy computers at higher prices.
Bangladesh Computer Council (BCC), call for to continue import of computers and spare parts duty free. It is demanding it since 1996. This demand is getting stronger from different sides. Thus importers and local manufacturers are opposing each other.
In fiscal year 1998-99, import duty on computer products was withdrawn. Since then, this sector is enjoying duty free imports. A sudden decision to impose duty on computer and computer spare parts will have thus crippling effect on domestic market..
If there duty free import withdrawn in the forthcoming budget while local manufacturer are not fully equipped to fill up vacuum, a sudden spike in computer prices may just be too big for customers to take. It may lead to a scandalous development, an official of Taiwanese computer brand Asus said.
Everybody has to consider the reality and realize that local computer manufacturing would need time to evolve, before the import duty was imposed he said. Incidentally, local consumer appliance giant Walton has set up a computer manufacturing factory. Desktops and laptops are produced locally in their factory and they are also exporting to at least five countries so far. Thus opposing lobbies are at work.
A senior official of telecommunication ministry said if low tariffs and taxes were imposed on computers and its related products made locally, discouraging imports it would be able to meet the country's growing local demand.
He said duty will be imposed on imported computers only adding that spare parts will remain duty free.