Ifaz Ehtamad ; Dhaka — Consumers planning to buy a new smartphone may need to act within the next few days, as mobile phone prices are projected to rise significantly from July 1 due to the expiration of temporary import duty privileges.
The interim government had granted a temporary 15% customs duty concession on imported smartphones in January this year to curb the grey market. However, this facility is set to expire on June 30.
With no extension announced in the proposed national budget for the upcoming fiscal year, the total tax burden on imported handsets is on the verge of skyrocketing, directly impacting retail prices.
Tax Burden Tops 64% as Associations Sound the Alarm
The Mobile Phone Industry Owners Association of Bangladesh (MIOB) recently sent a formal letter to the Bangladesh Telecommunication Regulatory Commission (BTRC) regarding the looming crisis.
According to the association, if the duty privileges are not extended, the total tax incidence on imported mobile devices will surge from the current 43.43% to a staggering 64.25%.
MIOB sources warn that this tax hike could translate into a 20% to 25% price increase for consumers at the retail level.
“Prices of core components like memory chips, motherboards, CPUs, and batteries are rising in the global market, making it impossible to lower handset prices,” said Jakaria Shahid, President of MIOB. “If import taxes increase on top of this, mobile prices will climb further, pushing many cost-conscious consumers back toward the grey market.”
When approached for a comment on the matter, BTRC Chairman Major General (Retd) Emdad Ul Bari declined to speak.
The Resilient ‘Grey Market’ and Premium Shortages
Over the last decade, a local mobile assembly and manufacturing industry has flourished in Bangladesh, successfully catering to the low-and-mid-range segments.
However, industry insiders emphasize that premium models from top-tier brands like Apple, Google, Huawei, Motorola, Samsung, and Xiaomi cannot be easily manufactured locally due to complex supply chains, specialized components, and limited domestic demand for high-end devices.
Consequently, the local market remains split between ‘official’ and ‘unofficial’ channels. Despite the BTRC’s introduction of the National Equipment Identity Register (NEIR) earlier this year to suppress unauthorized imports, unofficial phones remain widely popular across major shopping malls in Dhaka due to their lower price tags.
While the government initially slashed the customs duty from 25% to 10% in January to bridge the price gap between official and unofficial devices, global component price hikes had already inflated retail prices by BDT 500 to BDT 5,000 before the tax cuts took effect, neutralizing the expected market relief.
A Heavy Burden on the Common Consumer
If the government does not issue a last-minute directive to maintain the current tax structure, the ultimate financial blow will be dealt to ordinary citizens.
Tech entrepreneur Fahim Mashroor expressed deep concern over the development, pointing out that mobile connectivity is no longer an optional luxury.
“A smartphone is no longer a luxury item; it has become the primary tool for education, income generation, and accessing various digital services,” Mashroor stated. “Increasing smartphone prices means making access to digital services more expensive. Smartphones should be viewed as vital digital infrastructure, and the tax pressure on them needs to be minimized.”
With only days remaining before the financial transition on July 1, the tech industry and consumers alike are keeping a close watch on the government for any late policy adjustments.