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Grey Market Threatens Mobile Handset Industry

Industry: Mobile, Telecom & Mobile

Bangladesh’s mobile handset industry is operating at only 50% capacity, raising concerns of up to 40% job cuts due to the grey market invasion, VAT burden, and economic crisis. Investors are urging the immediate implementation of the National Equipment Identity Register (NEIR) to stop the illegal entry of handsets. They also seek the withdrawal of trade stage VAT and continued tax rebates during manufacturing.

To maintain the industry’s survival, manufacturers and assemblers request the government to avoid introducing new taxes that harm their competitiveness against the grey market. Around 50% of handset demand is captured by the grey market due to lacking restrictions. Chief Marketing Officer at Fair Electronics, warns of a potential 40% job cut if this trend persists.

Implementing NEIR would greatly support local assemblers and manufacturers in combating the grey market. While grey market traders contribute nothing to the national exchequer, imposing VAT and taxes on local manufacturers threatens the industry and reduces government revenue. Immediate action is needed to protect the industry, which has the capacity to meet the country’s annual demand of approximately 32 million handsets.

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