Committed to PEOPLE'S RIGHT TO KNOW
Vol. 5 Num 1082 Sun. June 17, 2007  
   
Star City


Computer prices go high before taxes come into effect


Although the tax and duties proposed in the new budget are yet to come into effect, the price of computers and accessories has already marked an inexplicable rise in the city markets.

Nafees Ahmed, a candidate of the ongoing HSC examination, wants to buy a new personal computer and his family has a budget of around Tk 32,000. But now things look bleak for Nafees as he fears that he might have to wait much longer for the PC.

"I wanted to buy the PC before the new taxes come into effect. But the prices have already increased outrageously," said Nafees.

An average Celeron processor powered computer that was available at around Tk 24,000 last week, is now being sold at around 27,000. An Intel Pentium processor powered computer is available at around Tk 33,000 while the same computer cost around Tk 28,000 last week.

Like Nafees hundreds of computer users rushed to markets of the city to purchase computers and accessories after the budget proposals were made, but they found that the prices rose by around 10 to 15 percent from the very next day of budget announcement.

The abrupt increase took the customers by surprise as the price hike was not supposed to affect the market before July when the proposed budget would come into effect.

Nurul Islam, a university student from Uttara went to the BCS Computer City in Agargaon on Thursday to get a new video adaptor for his computer. He wanted to buy an Nvidia 7 series graphics card that cost around Tk 14,000 only a few days back. However, Islam was taken aback after he found the same series of graphics card being sold at around Tk 18,000.

"I have been saving money for months to buy a new graphics card for my computer and I fell a few thousands of taka short that day," said Nurul Islam.

"I wonder why the authorities have imposed tax in such a booming industry especially when we, the students, consist the majority in the user base. It's the middle and lower income families who would certainly be the biggest victim," added Islam.

It is the market of Laptop computers that has been shattered after the tax proposal.

The few laptops that are available in the market are being sold at considerably higher prices. The Laptop that was available at Tk 45,000 before is now being sold at Tk 52,000, while the Tk 87,000 Laptops are being sold at a price of around Tk 95,000.

"The personal computer I could have purchased with my budget of Tk 32,000 now costs around Tk 40,000, which is absolutely shocking," said Nayeem Ahmed, a service provider who came to BCS Computer City to buy his new PC.

The abrupt increase in the prices of computer and accessories has created turmoil in the computer market. A number of businessmen have decided not to retail their products because of the future uncertainties, creating a major shortage of computer products.

"A lot of the stores are not retailing their products as they are wary of the ongoing situation. This created a major disturbance in the market," said Nurul Islam, sales official of Accorp Computers Ltd at BCS Computer City.

"Some unscrupulous businessmen have cashed in on this situation for making undue profit and are selling their products at significantly higher prices," he added.

The government has proposed a 10 percent tax on the import of computer, computer related goods and software, which would come into effect from July 1. The new tax is in addition to the value added tax (VAT) of 15 percent. The accumulated increase in the price of computer goods is feared to rise by around 25 percent.

However, with the abrupt rise in the computer prices in the past week, industry experts fear that the actual increase would be much higher after the budget comes into effect.

"When you impose a tax on the import of a certain product, the tax would affect the upcoming import of goods, not the one that are already available in the market. But the prices of computers have already increased which is shocking," said an expert.

"The ironic thing is that the goods that are exempted from duties would take months to mark a decrease in their prices," he added.

The experts also fear that the price hike would give rise to under-invoicing and smuggling of computer goods.

"The trickle down effect of the added tax would give rise to unethical business practices. The same product would be available at different prices in different shops and under invoicing would increase significantly," said Ahmed Hasan, chairman of Bangladesh Association of Software and Information Services (BASIS).

"As almost 70 percent of the user base in the industry are the lower budget group, the high prices would discourage most of these people from buying computers and subsequently may stall the progress of this booming industry," added Hasan.

Picture
Buyers are already paying more prices for computers at the BCS computer city. PHOTO: STAR