Professional security services have become a staple in many residences and offices across the country, and the need for their services is likely to go up as Bangladesh steadily marches towards LDC graduation.
This service sector has been accelerating for the last few years, and the government has been providing policy support to this sector, allowing existing companies to provide their services at minimum cost, and making it easier for new firms to enter the market.
The government had set a reduced VAT on this service at 10 per cent, but now it plans to raise the VAT on this promising industry to 15 per cent for FY25, citing that the sector is now mature enough, say officials involved in the matter.
Industry insiders however say such a move may increase costs of security services for homes and offices.
According to the Bangladesh Professional Security Services Providers Association (BPSSPA), “Throughout the 90s, private security service spread out all over Bangladesh, private security guards became a necessity as the RMG sector was setting off to a promising start, development was on the rise, Bangladesh’s Financial Institution sector expanded with new private Banks opening up to cater to the new economic activity, creating the need for a structured form of security service.”
“Till date, more than 800 security companies are working throughout the country. These companies have created job opportunities for more than 7 lakh personnel,” reads a published article written by Brig Gen (Retd) Sharif Aziz, who is the managing director of Elite Force.
Mohd Shah Alam Sarker, general secretary of the Bangladesh Security Services Companies Owners Association told The Business Post, “If the National Board of Revenue (NBR) imposes a higher VAT, the sector will be in a more adverse situation. The industry requires adequate support to grow stronger.”
Private security companies have expanded over the years, providing guards, investigation services, executive close protection services, due diligence, emergency evacuations, critical remote area operations, event security, conflict resolution, logistical support, electronics security, maritime security, dog squad support (K9) and many other services.
The key players in this sector are – Group 4 Secure Solution Ltd, Elite Security Services Ltd, Max Secure, Complete Security Solution Ltd (C2S), HRS Group BD, Care Force Ltd, Safeco Security Services, Orion Security Services Ltd, and Aegis Security Force (ASF).
Laptop import duties decreasing
A global chip shortage, coupled with persisting supply chain interruptions, high duties, USD shortage, and the devaluation of Taka, has turned laptops into expensive equipment.
Besides, an imposition of 15 per cent VAT on imported laptops, along with other taxes and duties, has exacerbated the situation, making new laptops increasingly unaffordable for a good segment of consumers. This situation has caused smuggling of laptops to rise in recent years.
Under the circumstances, the government plans to reduce import duty by 9.5 per cent to 22 per cent. Currently, there is 31 per cent overall duties and taxes in laptop imports.
State Minister for Posts, Telecommunications and Information Technology Zunaid Ahmed Palak had recently said at an event, “Due to higher VAT in import stage, laptop smuggling has been increased.
“If the smuggled laptop imports are caught through the integration of Bangladesh Telecommunication Regulatory Commission (BTRC), the NBR can increase revenue by Tk 2,000 crore.”
Meanwhile, speaking to The Business Post, Bangladesh Computer Samity President Subrata Sarkar said, “Laptops sales in Bangladesh are expected to reach 500,000 units by 2024. HP, Asus, Dell, Lenovo and Acer are the top-selling brands.
“The total laptop market size in our country is around Tk 10,000 crore.”
1 mobile for 1 person under baggage rule
Under the new move, which will likely be introduced in the upcoming budget, a person can carry a maximum of 1 mobile set duty free. This move aims to boost the local mobile manufacturing industry, reduce unauthorised sets at cheaper costs, and check smuggling.
Currently, duty free facility is given for the items [mobile phone 2 sets and all other items not more than one of each item] contained in Schedule 3 of the Baggage Rules.
Now, Bangladesh manufactures and assembles around 95 per cent mobile sets within this country, and this market size is around Tk 15,000 crore.
According to BTRC data, 4.145 million mobile phone sets were assembled and manufactured in January 2022. This decreased to 1.892 million in January this year, a reduction of about 54 per cent due to higher VAT, grey market and smuggling.
In terms of imports, 61,891 mobile phones were imported in January 2022, compared to only 5,050 in January this year, a decrease of about 92 per cent.
Industry insiders say in addition to 5 per cent VAT on each component of mobile sets, locally manufactured mobile handsets are subject to around 7.5 per cent VAT.
