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VAT may Increase on Domestically Manufactured Mobile Phones

Industry: Mobile, Telecom & Mobile

The National Board of Revenue (NBR) is considering an increase in Value Added Tax (VAT) on domestically manufactured mobile phones, which could result in higher prices for consumers. The proposed VAT rates are expected to vary based on the level of manufacturing involvement. Companies that produce their own machinery and parts may face a 3 percent VAT, while those that assemble mobile phones using at least two self-manufactured components could see a VAT rate of 3 to 5 percent. For companies that solely import and assemble parts within the country, VAT rates may range from 7.5 to 10 percent.

With 14 companies currently manufacturing mobile phones in Bangladesh, domestic manufacturers play a crucial role in meeting the country’s demand, which amounts to approximately one crore smartphones annually. Brands like Samsung, Oppo, Vivo, Tecno, Symphony, Walton, Lava, Xiaomi, Nokia, and Realme rely on domestic manufacturers to produce their devices. The previous imposition of a 5 percent VAT at the business level has already contributed to a slight increase in mobile phone prices for consumers.

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