Laptops to get cheaper as over 10% tax cuts proposed on import

Laptops are expected to get cheaper from the upcoming fiscal year 2024-25 (FY25), as the government has proposed a 10%  reduction in total tax incidence on laptop imports, aiming to prevent the arrival of refurbished and counterfeit products as well as to support local freelancers and software developers.

Currently, importers have to pay 31% of the total tax incidence, including a 5% customs duty, on laptop imports.

Finance ministry officials said the tax cut will support the government's vision of "Smart Bangladesh", with the objective of transforming the country into a prosperous, developed, and technologically sophisticated nation by 2041.

The National Board of Revenue (NBR) has observed that due to the current total tax incidence and gradual increase in foreign currency exchange rates, laptop prices have become unaffordable for the general public, The Business Standard reported on 30 May.

This has also led to an influx of substandard and refurbished laptops on the local market.

Considering the situation, the finance ministry has taken this initiative to make laptops more affordable in the local market to support the local software industry and freelancers, NBR officials added.

Industry insiders have welcomed the plan, saying the government had earlier increased the tax on laptop imports to protect a local manufacturer, but this ultimately increased costs for consumers.

"If the government reduces the total tax incidence on laptop imports, it will help create competition among local manufacturers to improve product quality," Russell T Ahmed, president of the Bangladesh Association of Software and Information Services (BASIS), told TBS last month.

As a result, local manufacturers will improve their product quality to compete with high-quality imported goods, and customers will also benefit from this, he added.

"This move will help introduce a variety of brands into the local market," he said. "In a free economy, we should allow the presence of both imported and local products. Otherwise, low-quality, refurbished, and smuggled products will fill the gap."

He said, "We should encourage 'Made in Bangladesh' products in local procurement, but we need time to develop ourselves. This also requires the import of high-quality products, but last year we faced setbacks." 

The local industry faces two challenges: improving product quality and fulfilling demand. Local companies have not met local market demand, which is why the government has taken this move.