Phone traders reject NEIR rollout, call tax cut 'insufficient'
All mobile shops countrywide will remain shut until further notice, says Mobile Business Community Bangladesh
The process of blocking unregistered mobile handsets officially began on Thursday (1 January) with the launch of the National Equipment Identity Register (NEIR) system with the government reducing total duties on handsets from 61.8% to 43.4%.
But, the moves soon sparked protests by mobile phone traders, who found the tax cut was insufficient and that the NEIR system has been enforced abruptly. A group of protesters later besieged and vandalised the Bangladesh Telecommunication Regulatory Commission (BTRC) headquarters, accusing the authorities of not easing import procedures or sufficiently rationalising taxes.
Mobile phone traders gathered at the BTRC building this afternoon, protesting what they described as the abrupt implementation of NEIR alongside a tax reduction that falls far short of expectations. At one stage, the protesters hurled brick chips and stones at the building, damaging glass panels, doors and windows.
The overall tax incidence on imported handsets has been reduced from 61.8% to 43.4% but traders argue that the reduction would not much affect the prices.
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Some traders said the tax cut could lower the prices of officially imported iPhones or Samsung devices by around 15%.
If their estimates are considered, formally imported Samsung's flagship S25 Ultra, which retails at Tk236,000, and the iPhone 17 Pro Max, priced at Tk250,000, could likely fall to around Tk201,000 and Tk212,000 respectively.
However, these figures are not based on any official statement or declaration.
NEIR comes into operation
With the launch of NEIR, if any new handset, brought through an informal channel and not duty-paid, attempts to connect to the country's mobile networks, it will now be automatically detected and, after a stipulated period, disconnected.
BTRC Deputy Director (Media) Jakir Hossain Khan said the system came into operation as announced earlier. From now on, when a new handset connects to a mobile network, its details will automatically be transmitted to the BTRC server.
"If the handset is found to be unregistered, the user will initially receive network signals but will be required to register the device within three months," he said, adding that failure to complete registration within the stipulated time would result in the handset being blocked.
According to the BTRC, more than 60% of mobile phones in use in Bangladesh are unofficial. Sector associations claim the real figure is closer to 90%, making it one of the largest grey markets in the region.
Tax cut fails to appease traders
The tax reduction was announced today at a briefing at the Foreign Service Academy, following a meeting of the Advisory Council chaired by Chief Adviser Muhammad Yunus.
Chief Adviser's Press Secretary Shafiqul Alam said customs duty on imported mobile phones has been cut from 25% to 10%, while the duty for locally manufactured or assembled phones has been reduced from 10% to 5%. As a result, the total tax burden on imported handsets will fall to 43.43%, with a corresponding reduction for locally manufactured devices.
The government says the measures will help expand Bangladesh's mobile phone industry, attract new investment, reduce handset prices and discourage the inflow of used and refurbished phones, which often harm consumers and deprive the state of revenue.
Despite the government's optimism, importers and local assemblers say the cuts are inadequate. They rejected the move, saying the reductions fall far short of what is needed to make the market competitive and revive legal trade.
Shamim Molla, president of the Mobile Phone Importers Association, said Bangladesh has one of the highest mobile phone tax rates in the world.
"Across the Middle East, mobile phone taxes are around 5%. Even in the US market, taxes are not more than 10%," he said. "To make the market competitive, we proposed a tax rate of 10-12%. Any tax above 20% on mobile phone imports is simply unacceptable."
He added that lowering taxes would encourage legal imports, increase compliance, and ultimately boost government revenue. "If taxes are reduced rationally, businesses will import phones legally and pay taxes instead of avoiding them," he said.
Local handset assemblers have also termed the tax cut insufficient. Md Jahirul Islam, director of the Mobile Phone Industry Owners Association of Bangladesh (MIOB), welcomed the government's intention to facilitate legal imports but said the benefits for local manufacturing would be negligible.
"The government reduced customs duty for local manufacturers by 5%, but in reality the effective reduction will be only 1-2% because VAT still applies," he said. "Unless VAT at the local manufacturing stage is withdrawn, this decision will not deliver any meaningful benefit."
He added that local manufacturers are planning to hold a press conference soon to formally present their concerns and demands.
Responding to questions about whether mobile phone taxes have become more rational, Shafiqul Alam said Bangladesh's tax-to-GDP ratio remains low and revenue mobilisation had to be considered.
"Before finalising the tax cuts, we conducted several studies. A panel of experts reviewed the matter and made the recommendation," he said. "We believe this decision will ultimately be beneficial for all stakeholders."
Industry data show Bangladesh sells between 3.2 and 3.5 million smartphones each month. Around 80-85% of annual sales – nearly 30–32 million units – are Android devices, dominated by brands such as Xiaomi, Samsung, Vivo, Oppo, Realme, Infinix and Tecno.
Bangladesh's steep smartphone prices are widely attributed to one of the highest import tax burdens in Asia. Before the tax cut, officially imported devices faced a cumulative tax of about 61%, while even locally assembled phones carried an 18-22% tax.
By contrast, the US imposes no import duty, with buyers paying only state-level sales taxes of 4-9%, while the UK applies no customs duty and levies a flat 20% VAT.
Even after the reduction, Bangladesh's import tax on mobile phones is still among the highest in the region.
Protest turns violent
Today, tensions escalated later in the day when traders besieged and vandalised the BTRC building following an altercation during a meeting with the commission chairman. The traders were dispersed from the area after they damaged the building, breaking glass panels, doors and windows. Many protesters were reportedly detained by the army during the demonstration.
In protest of the NEIR launch, the Mobile Business Community Bangladesh today announced the shutdown of all mobile shops countrywide until further notice.
Shamim Mollah, vice-president of the Mobile Business Community Bangladesh, accused the government of deceiving traders.
He claimed that during a meeting in early December, the ICT affairs special assistant had assured them of a three-month grace period before shutting down unofficial phones.
"We were told that no imported phones would need registration within the next three months. However, the BTRC suddenly implemented NEIR today," he said.
Meanwhile, BTRC Deputy Director (Media) Jakir Hossain Khan described the attack on the commission building as "unwarranted" and said legal action would be taken.
He said NEIR was implemented after considering traders' demands and noted that the cabinet had approved a tax reduction earlier in the day. "The process of addressing the traders' other demands is also underway," he added.
The grey market is estimated to support 10 to 15 lakh livelihoods, involving more than 20,000 retailers and traders. Many fear the sudden shift will disrupt a long-established ecosystem, while traders allege that NEIR is being financed by mobile manufacturers, raising concerns about monopoly-driven incentives.
Protests for NEIR reform have been ongoing since November last year. Key demands from protesters included: reform NEIR policy with stakeholder consultation; six-month or longer grace period before strict enforcement; simplify import and registration processes; reduce import taxes and ensure equal opportunities for all traders; and end alleged syndicate practices controlling the handset market.
No disruption to existing users
The BTRC has urged users not to panic, assuring that no handset currently active on the network – whether authorised or unauthorised – will be disconnected at this stage.
BTRC Chairman Major General (retd) Md Emdad Ul Bari said all handsets currently in use would remain operational. Devices held in traders' stocks, whose International Mobile Equipment Identity (IMEI) numbers were submitted by 31 December, will also continue to function. Only brand-new handsets joining the network from 1 January onwards will fall under the NEIR process.
Expats can bring home 2 handsets extra
The regulator also announced special facilities for expatriates. Bangladeshis returning from abroad will be allowed to bring their personal mobile phone along with up to two additional new handsets.
These devices will remain active on the network for three months, during which users must complete registration. The BTRC said the process can be completed online through the NEIR portal using passports or travel-related documents
Earlier last month, the BTRC chairman at a press conference said the regulator will also introduce a system allowing users to register second-hand phones or devices brought as gifts from abroad.
What happens to phones now?
Under the new system, all mobile phones that were already in use on the network before the launch of NEIR will continue to operate and will be registered automatically through their biometric SIMs. Users can check the registration status of their handset through the BTRC's NEIR website or by SMS.
To do so by text message, users need to type KYD, followed by a space and the 15-digit IMEI number, and send it to 16002. The IMEI number can be found in the phone's settings or by dialling *#06#.
For those wishing to change their handset or SIM card, the existing device must first be deregistered using the USSD code *16161# or through the NEIR portal, after which the new device must be registered.
Any new handset connecting to the mobile network will be subject to mandatory verification and registration. Phones purchased abroad will be allowed to remain active for three months, during which users must complete registration with valid proof of purchase along with passport, visa, entry stamp, and other supporting IDs.
Handsets identified as illegal and left unregistered after the stipulated period will be disconnected from the network.
