Thousands of imported mobile phones unaccounted for

Thousands of imported mobile phones unaccounted for

Economic and Finance Committee points out possibility of mobile phone deflection. Bhutan imported 122,136 mobile phones from June 2021- June 2022

Mobile phones imported to Bhutan may be deflecting to countries like India as there is a huge mismatch between the numbers of phones imported and those recorded as currently being used in Bhutan. This is a serious issue that needs to be studied and appropriate interventions made. This was submitted by the Chairperson of the Economic and Finance Committee, Kinga Penjor, member of the National Assembly from Gangzur – Minjey constituency, as he submitted the report to the National Assembly during the deliberation of the Tax Bill of Bhutan 2022 on November 17, 2022 and recommended to impose taxes on import of mobile phones.

In a comprehensive and in-depth report, the Economic and Finance Committee made a submission of import of mobile phones from June 2021 to June 2022. The recommendation to increase taxes was based on the huge surge in the import of mobile phones into the country taking advantage of the existing zero tax rate. The committee has also pointed out the possibility of deflection.

After assuming that about 20,000-30,000 mobile phones are depreciated and damaged with dual SIM, still a large amount of phones imported are unaccounted for, the Committee said.  The chairperson of the Committee said it is important for public information and added that such imports are factors for the decline in foreign currency reserve.

The Committee reported to the House that it has done a comparative market price of mobile phones in Jaigoan, West Bengal, India and Bhutan. It is found that mobile phones are bit cheaper in Bhutan. Therefore, there is reasonable doubt that mobile phones from Bhutanese market are deflected to India.

“Despite intense studies, the Committee couldn’t find where half of the imported mobile phones are gone. This is a concern,” the chairperson said. Meanwhile, the House agreed to include the report in the recommendation.

According to the Committee, from June 2021-June 2022, Bhutan had imported 122,136 mobile phones worth Nu.2, 517,177,742.34. Data available with Bhutan Telecom, states there were 464,452 subscribers as of June 2021 and 477,374 subscribers as of December 2021. In six months, subscribers increased by about 13,000 as per the findings of the Committee.

On an average, there is increase of 2,154 subscribers in a month. As of May 2021, mobile phones worth Nu 470, 000 were imported. Bhutan Telecom had about 19 thousand new subscribers while TashiCell had 266,469 subscribers as of May 2021.  In the country there were 728,767.33 subscribers as of May 2021.

The SIM users of Bhutan Telecom has increased by 15,008 while the users of Tashi Cell decreased by 3,273 from June 2021-June 2022.

Bhutan Telecom had 479,460 subscribers and Tashi Cell 266,363 subscribers from June 2021-June 2022. In total, there are 745,824 subscribers in the country.

According to the latest report of Bhutan InfoCom and Media Authority (BICMA), there are about 468,848 Bhutan Telecom subscribers and about 311,991 Tashi Cell subscribers as of 30 September 2022.   

Speaking about the hike in mobile phone imports, Sonam Dorji, a private employee based in Thimphu, said it could be because of the pandemic. “Schools went online and children needed to buy phones. On the other hand, during lock-downs, for most, mobile phones were the best companions and it is possible that some phones would have broken down,” he said, adding these people would have bought new phones. A civil servant said that if the import of mobile phones were high even during the pandemic, the reasons could be either need or business. “School children had to buy phones. This was need. On the other hand, the pandemic affected the incomes of most people. Unless really required, I do not think the average Bhutanese would buy a phone when he/she is under economic stress,” he said. He added that the life spans of most android phones and I-Phones are long. “So, there is really no need for buying a new phone. Based on the findings of the Committee, it is possible that some were into business, deflecting mobile phones across the border to India,” he said.

Sangay Rabten from Thimphu