Millions Evaded in Taxes Through Illegal Mobile Phone Sales by 4 Shops

In Bangladesh, mobile handsets imported without paying taxes — widely known as “unofficial handsets” — are flooding the market. Official statistics suggest the government is losing around Tk 2,000 crore in revenue annually due to these phones, putting domestic handset manufacturers under severe pressure.

Recent reports show that the country’s handset production industry is struggling to survive amidst this influx of tax-evaded imports. In the first quarter of 2025 (January–March), handset production fell nearly 10%, down to 5.476 million units. Alarmingly, in June alone, production dropped by almost 30%. According to the Mobile Industry Owners’ Association of Bangladesh (MIOB), nearly 40% of the market is now dominated by the grey market, even though GSMA reports local factories have the capacity to meet 99% of domestic demand.

Investigations reveal that selling unofficial handsets has become an “open secret.” Shops such as Apple Gadget, Sumash Tech, SMM Gadget, and Dazzle Mobile Shop are allegedly leading players, running large-scale businesses with these tax-evaded devices. They even use popular Facebook and YouTube influencers to promote the illegal phones.

A review of their websites shows that 80–90% of Apple, Samsung, and Motorola phones sold are unofficial imports. On July 20, when this reporter visited Apple Gadget and Sumash Tech outlets at Bashundhara City Shopping Mall, staff could not provide a single official Samsung handset — their stock was flooded with unofficial imports.

The shops openly operate in major hubs like Jamuna Future Park, Bashundhara City, and Chattogram’s Nasirabad, boasting lavish showrooms. Dazzle Mobile Shop, for example, runs multiple outlets in Jamuna, Bashundhara, Mirpur, Uttara, and Dhanmondi, selling phones at prices Tk 30,000–50,000 lower than the official market.

Although the government launched the National Equipment Identity Register (NEIR) system to block illegal phones from networks, it is yet to be fully implemented. The Bangladesh Telecommunication Regulatory Commission (BTRC) has decided against renewing its old contract with Synesis IT, opting instead for a new tender process. However, delays in implementation are giving illegal traders more room to thrive.

Experts say lack of coordination between the National Board of Revenue (NBR) and BTRC, weak customs surveillance, and political influence are the biggest barriers to stopping the illicit trade. Flaws in government policy and poor enforcement are destroying the legitimate handset manufacturing sector while giving illegal businesses free rein.

Local manufacturers warn that the investments of 17 domestic handset factories are at risk. They are demanding the immediate nationwide rollout of NEIR to curb smuggling and safeguard local production.

BASIS Support Committee Chairman Rafiel Kabir told the media that some officials within BTRC were attempting to bypass proper tender procedures to award the NEIR project directly. The previous tender would have cost the government around Tk 5.5 crore annually, but a new system is expected to be cheaper and more efficient.

For now, the government has set aside Tk 5.68 crore for one year of NEIR maintenance, and BTRC has moved to a quality-and-cost-based selection method instead of direct procurement. But until full implementation, the government continues to lose revenue.

Industry leaders are sounding the alarm. Md. Saifuddin Tipu, Executive Director of Excel Telecom Ltd. — Samsung’s authorized national distributor in Bangladesh — said that about 50% of Samsung phones in the market are illegally imported. As a result, Samsung is using only half of its production capacity. This not only deprives the government of revenue but also costs the country jobs, discourages foreign investors, and increases outflow of foreign currency. He warned that illegal, counterfeit, and refurbished phones are eroding brand trust and posing security risks.

He added: “Illegal imports face zero VAT or tax, whereas official imports face nearly 35%. We have repeatedly urged BTRC and NBR to expedite NEIR and strengthen border monitoring to stop these smuggling syndicates.”

Zakaria Shahid, Managing Director of Symphony Mobile and President of MIOB, said the influx of tax-evaded handsets has put the local industry under immense pressure. “Illegal phones are sold much cheaper, making it nearly impossible for legitimate importers and manufacturers to compete. These now control about 40% of the market, discouraging investment in the local industry,” he said.

He also noted that many of the illegal phones are counterfeits, copies, or low-grade refurbished devices, which often emit radiation at unsafe levels. Consumers remain largely unaware of these risks.

In summary, not only is the government losing billions in revenue every year, but Bangladesh’s technology sector is being held back, consumers are being deceived, and national security risks are rising due to widespread illegal handset imports.

Attempts were made to contact senior officials of Apple Gadget, Sumash Tech, SMM Gadget, and Dazzle Mobile Shop. Only Didarul Islam Khan, owner of Dazzle Bangladesh, could be reached, but he declined to comment as of publication.