Mobile phones to become costlier from July as duty cut expires
The government cut customs duty on imported mobile phones and equipment from 25% to 10% in January to narrow the price gap between officially imported and grey-market devices. The concession, valid until 30 June, reduced the effective tax burden on imported handsets to about 43.43% from over 64%
Highlights:
- Smartphone import tax concession ends on 1 July
- Effective smartphone tax burden rises from 43% to 64%
- Official smartphone prices may increase by 20–25%
- Rising component costs already pressure phone production expenses
- Higher prices could drive consumers toward grey-market phones
- Premium smartphones remain import-dependent, limiting local manufacturing
Consumers will have to pay more for officially imported smartphones from 1 July, as a temporary import duty concession has not been extended in the proposed FY27 budget.
The government cut customs duty on imported mobile phones and equipment from 25% to 10% in January to narrow the price gap between officially imported and grey-market devices. The concession, valid until 30 June, reduced the effective tax burden on imported handsets to about 43.43% from over 64%.
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As the National Board of Revenue (NBR) has not extended the measure, the effective tax burden will return to 64.25% from 1 July. Industry leaders estimate official smartphone prices could rise by 20-25%.
The Mobile Phone Industry Owners Association of Bangladesh (MIOB) warned the move would raise retail prices. "Our production costs are already rising as prices of memory chips, processors, motherboards and batteries continue to increase globally," said MIOB President Zakaria Shahid.
"If duties return to previous levels, smartphone prices will inevitably rise further, and many consumers may return to the grey market," he added.
An NBR customs official, requesting anonymity, said the concession was withdrawn because it failed to achieve its objectives. "The incentive was introduced to encourage legal imports and local manufacturing. But neither official imports nor domestic production increased as expected," the official said.
Bangladesh has developed a sizeable phone assembly industry producing mainly entry-level and mid-range devices. However, premium smartphones from brands such as Apple, Google, Huawei, Motorola, Samsung and Xiaomi remain commercially unviable to assemble locally, leaving Bangladesh dependent on imports for flagship models.
Higher taxes may strengthen grey market
Bangladesh's smartphone market remains split between official and grey-market imports. The wide price gap has made unofficial devices attractive despite their lack of an official warranty and after-sales support.
Although the Bangladesh Telecommunication Regulatory Commission launched the National Equipment Identity Register (NEIR) earlier this year to identify and eventually block unregistered devices, grey-market phones remain widely available.
Technology entrepreneur Fahim Mashroor said higher smartphone prices would hurt consumers at a time when smartphones have become essential for education, employment, digital financial services and e-commerce.
"A smartphone is no longer a luxury. It is part of the country's digital infrastructure, and the tax burden should be reduced," he said.
Industry sources said several brands had already increased handset prices by Tk500-Tk5,000 before the January duty cut took effect, citing higher global component costs, while unofficial imports continued unabated.
With the effective tax burden returning to more than 64%, industry players fear the price gap between official and grey-market devices will widen further, discouraging legal imports and potentially reducing long-term government revenue.
