The budget for the fiscal year 2023-24 is being presented to the National Parliament on Thursday, June 1. Finance Minister AHM Mustafa Kamal will present the budget titled ‘Across the long journey of development towards a smart Bangladesh’. In the proposed budget, VAT is being increased from 5 percent to 7.5 percent at the production stage.
According to sources, the national budget of the next financial year 2023-24 may propose to impose VAT on the production stage of mobile phones of domestic companies. In this case, VAT may imply at three levels. Among them, the companies that will make their own machinery and parts and produce mobile phones, can be charged VAT at the rate of 3 percent. And in the case of companies that add mobile phones, VAT can be levied in two ways.
On the other hand, 7 and a half to 10 percent VAT can imply on those companies who import all parts and assemble them in the country only.
At present, among the local mobile phone companies, only the integrators are paying 15 percent VAT. But, the VAT rate of 5 per cent for companies that have surface mount technology (SMT) assembly process facilities with additions will be 7.5 per cent from June 1 this year. Besides SMT, companies that have power circuit board (PCB) addition, battery charger addition system—their current VAT rate is 3 percent, which will be 5 percent.
During the budget announcement for the current financial year 2022-23, 5 percent VAT was imposed at the business level. As a result, the price of mobile phones increases slightly at the consumer level. This price may increase further in the next financial year as well. In this case, those manufacturers who make at least two parts themselves and make mobile phones have to pay VAT at the rate of 3 percent. It can be increased to 5 percent.
