Mobile phone prices to go up on higher tariffs

Prices of mobile phones will go up next time after the Ministry of Finance decided to increase the import tariff by 8%, replacing the old tax rate range from 0% to 5%.

The tax adjustment has become effective since June 20. However, the tariffs on mobiles phones imported from China and ASEAN remained unchanged, at 0% and 5%, respectively.

Huynh Van Thi, managing director of PV Telecom as an authorized Nokia distributor, forecasted that mobile phone prices would increase due to the tax adjustment.

Additionally, the higher dolllar/dong exchange rate will put a pressure on mobile retailers when they have to use the greenback to settle import deals, he said.

According to Thi, the mobile phone price on the local market has been slightly revised up, although not on a par with the new tariff as well as the appreciation of the dollar.

Bui Ngoc Khanh, director of FPT Mobile, also affirmed that the new tax change would force importers to increase price.

However, industry insiders said that retailers were taking advantage of the tax adjustment to increase prices because the new tax is only impacting on mobile phones imported from countries other than China and ASEAN.

The Ministry of Finance estimates 70% of imported mobile phones in the country comes from China and ASEAN countries and the remaining 30% from elsewhere.

Nguyen Van Phung, deputy head of the Tax Policy Department under the Ministry of Finance, told the Vietnam Post said that a huge number of mobile phones in the country were imported from China. Thus, the tax adjustment would not have any significant impact on local importers.

A source from The Gioi Di Dong, one of leading mobile retailers in Vietnam; also said that over 80% of mobile phones in the country are imported from China.

Do Ngoc Cuong, director of Viettel Importing and Exporting Company under the military-run Viettel, said now his company had not revised up prices since the new tax. "However, we will consider a price increase," he added.

The Ministry of Finance reported that the total expenditure on imported mobile phones in the first quarter this year reached US$273 million. At that time, half of imported mobile phones come from China, 17% from ASEAN member countries and South Korea, and the remainder from elsewhere.

The ministry forecasts that the total expenditure on imported mobile phones would reach US$1.2- 1.3 billion this year. (SGT)