A high imposition of import tax on cameras in Bangladesh is holding back the market that however, is being enjoyed by neighbouring countries. Digital photography has matured an industry in itself as people take photography as an independent profession for living, say top photographers in the country.



However, in spite of a much developed market for cameras at the immense growth of the media, the industry is yet to experience a peak. The slow growth of the market owes to the duty structure broken down between 25 per cent customs duty, 18.75 per cent value added tax, 3 per cent advance income tax, 1 per cent pre-shipment inspection and 2.28 per cent advance trade vat which accumulate to 50.03 per cent total taxes.

Because the neighbouring countries has the minimum import tax imposed on cameras Ñless than one-third of what Bangladesh leviesÑ the country is losing the market to Nepal and India. On the other hand Nepal enjoys international demand greatly from countries like Bangladesh because of only eight per cent tax imposition. India too has similar market because of 15 per cent tax on cameras.



Bangladesh is considered one of the most developed countries in Asia for photography, says Shahidul Alam, the principal of Pathshala, South Asian Institute of Photography and a pioneer behind home grown concepts of photography. The government should definitely work on to facilitate the photography sector just as it has done to develop the information and communication technology industry, he says, more importantly when local photographers are bringing in foreign currencies by selling their photos in the international market.

If the multifunctional mobile phones can enjoy a flat import tax of Tk 300, I do not see any reason why digital cameras should have such an exorbitant import tax, says Mostafa Jabbar, the president of Bangladesh Computer Samity. The BCS has officially requested the National Board of Revenue to reduce the digital cameraÕs import tax and set the tax scheme similar to that of the mobile phone, he says.

The unfavourable local import tax is not only depriving the government of its expected revenue but discouraging the camera manufacturers to invest locally, say industry sources.

Using the opportunity, huge quantities of digital cameras are smuggled into Bangladesh by importers and grey channel operators alike in connivance with the customs. Sources in the industry reveal that the malpractice of under invoicing of camera imports continue at large. At the failure to arrest the illegal imports, the government is losing taxes worth more than a crore every month, they say.

On the other hand, buyers are unable to avail the service and warranty for the digital cameras when they purchase from the grey channel, says Shahidul. For the genuine cameras, we have to take it to Singapore and elsewhere for availing the service and warranty which becomes a complicated process, he points out.

Unless local import is encouraged by the government, we cannot develop local service centres, says Shahidul.

While the local market size for digital cameras value at least $400,000 annually, hardly one third of the amount is officially declared by the importers to evade taxes, say camera distributors.

Cameras are still considered a luxury item in Bangladesh and as a result a high rate of tax is levied, discouraging a growth in the market that other countries are taking an advantage of, says Mostafa. A lot of individuals even from Bangladesh are buying cameras from abroad finding local prices unfavourable. As a result the importers are being demoralised, camera distributors observe.

If this trend continues and the government remains unbent to reduce taxes, manufacturers may lose the interest to invest in the Bangladesh market, distributors fear. Out of the leading camera manufacturers in the country only a few have invested through distributors while the remaining brands are available through grey channel.

At present 90 per cent cameras come via the grey channel with their prices under invoiced to evade tax and make a higher profit. At the current taxes imposed, the government is supposed to earn a revenue of Tk1.40 crore every month and nearly Tk17 crore in a year, says an inside source.

However, because of the high rate of duty imposed, even the market size is under declared from $400,000 to roughly $50,000, which entitles the importers to pay only Tk17 lakh every month.

According to a high official at the National Board of Revenue, the market for camera has a limited consumer segment and therefore is not as spread as mobile consumers. We will look into the matter if we are officially approached by the concerned organisations, says the top official.