Electronics importers face uneven competition

Electronics goods and motorcycle importers yesterday urged the government to reduce duty on imports as they are paying what they said illogical duties, losing competitive edge to the local manufacturers.
“We are in an uneven playing field due to the higher duty gaps between the local manufacturers and the importers, said Matiur Rahman, president of Bangladesh Motorcycle Manufacturers and Assemblers Association (BMMAA), a platform of bike importers.
He spoke at a pre-budget discussion co-organised by Bangladesh Electronics Merchants Association (BEMA) and the BMMAA at Sonargaon Hotel in Dhaka.
Rahman said the motorcycle assemblers have to pay around 83 percent more duties compared to the local manufacturers.
Customers, however, do not get the benefits as they have to buy motorcycles from the local manufacturers at the same price that the assemblers offer.
According to the BMMAA, Bangladesh sells 3.5 lakh pieces of motorcycle a year, of which 85 percent are imported.
Rahman, who is also the chairman and managing director of Uttara Motors, said motorcycle assemblers paid the government Tk 2,275.78 crore over the last three years as duties and value added tax.
He urged the government to bring down the duty gap to 20-30 percent to safeguard the interest of the customers.
BEMA leaders also urged the government to reduce duty on imported refrigerators.
Giving an example, a BEMA leader said an imported air conditioner, after paying all duties, is sold at Tk 43,000, whereas the local manufacturers, who do not need to pay any duty and VAT, sell the product of the same cooling capacity at Tk 46,000.
The local makers' price should have been much lower, he added.
The government should withdraw the recently imposed 25 percent regulatory duty on import of refrigerators, said Chairman of Bangladesh Electronics Merchants Association Amir Hossain Khan.
He said the total duty on imported refrigerators is 136 percent, including 25 percent regulatory duty, whereas the duty for the locally made refrigerators is only 14 percent.
Recently, the National Board of Revenue (NBR) set 25 percent regulatory duty on import of luxury items, terming refrigerators and bikes as luxuries, Khan said, adding that home appliances do not fall in the luxury category.
The government should not impose any illogical tariff on imported refrigerators, Khan said.
AM Hamim Rahmatullah, managing director of Singer Bangladesh Ltd, said the importers of electronics products have to fight a 122 percent duty gap with the local peers, for which the importers are facing an uneven competition.
Moreover, the government does not realise any VAT from the local manufacturers, he said.
“We must not have such a big difference in duties between the importers and local manufacturers,” he said.
He also criticised the government for giving an "undue favour" to a local refrigerator maker.
Industries Minister Dilip Barua said he would call a meeting soon to discuss the issues with the stakeholders.
AK Azad, president of the Federation of Bangladesh Chambers of Commerce and Industry, also spoke.