Illegal import of handsets costs govt Tk 60cr a year

The government loses revenues worth Tk 59.4 crore a year due to import of mobile phones through illegal channels, a recent survey found.

Handsets worth around Tk 2,376 crore are being imported every year by paying taxes, while the grey market brings in mobile phones worth Tk 594 crore, according to the survey by Samsung Electronics.

As the government raised value-added tax on handsets from 10 percent to 15 percent and slapped a surcharge of 1 percent in the current fiscal year, the potential losses will stand at Tk 163 crore a year, it said.

Also, about half of the high-end mobile handsets brought into the country come through illegal channels owing to high import duty, the survey found.

Samsung conducted the survey in June at the capital's Bashundhara City and Eastern Plaza shopping malls. The results of the survey were forwarded to Bangladesh Telecommunication Regulatory Commission in August.

Around 20 lakh high-end handsets are imported every year, officials of the consumer electronics giant said.

The government lost revenues of Tk 16.6 lakh alone from 350 handsets of Samsung Galaxy S5 model, the survey report said. At present, Samsung is selling the model for Tk 60,000, while at the grey market it is available for Tk 42,900 -- a gap of Tk 17,100 or 28.5 percent.

“This will enforce a lot of consumers to shift towards the grey market for their purchases. The grey market will gain a significant market share,” Samsung said in the letter to BTRC.

In June, Samsung sold 1,200 units of S5 at Tk 60,000 each, whereas 350 units were sold in the grey market at Tk 44,900 each. As the import duty on S5 was Tk 4,743 each, it lost revenues of Tk 16.60 lakh in one month alone for the single item.

Hasan Mehdi, head of marketing at Samsung Electronics, said the government will be able to collect Tk 30 crore to Tk 40 crore a year from smartphones if it can control the grey market, which has a 20 percent share.

“Customers of these handsets do not get any warranty or after-sales service, while the government loses huge tax too,” he said, adding that it will be easier to control the grey market if the government reduces import duty.