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Azerbaijan may launch raids in retail outlets selling mobile phones

ICT Materials 22 September 2018 10:49 (UTC +04:00)

Baku, Azerbaijan, Sept. 22

By Huseyn Veliyev – Trend:

Major suppliers of mobile phones in Azerbaijan have appealed to the Ministry of Taxes regarding the organization of raids on the mobile phones retail sales market, a source in the market of official sales of mobile devices told Trend September 21.

The source said the ministry replied that this issue was put on the agenda.

"These measures can not be called radical, as the raids can be announced in advance. On the other hand, these measures are quite legal, since the devices exhibited in retail outlets must be official. In turn, this will have a positive impact on economic growth," the source said.

In the second half of August, the state duty for registration of IMEI codes of mobile devices came into force. This refers to the application of a differentiated method of registration, which involves the classification of duties on mobile phones of high, medium and low price segment. This allows to determine a fixed fee for mobile phones depending on their cost and model. For example, the duty on expensive iPhone models differs from the duty on phones of cheaper price segment.

For example, the registration of mobile devices with a market value of up to $ 100, which do not have access to the Internet, photo and video functions, costs 20 manats.

For other mobile devices, the cost of registration will be 30 manats (for mobile devices with the market price of up to $ 100), 50 manats (for mobile devices with the market price from $ 101 to $ 200), 60 manats (for mobile devices with the market price from $ 201 to $ 400), 70 manats (for mobile devices with the market price from $ 401 to $ 700), 100 manats (for mobile devices with the market price from $ 701 to $ 1000), 150 manats (for mobile devices with the market price from $ 1001 and above).

"Clearly, the increase in the cost of registration of devices contributes to the increase in revenues to the state budget, as the turnover of companies operating officially will increase, and the turnover that evaded the treasury will decrease. Therefore, we appreciate this step and even hope that the price of registration of high-end devices will increase even more," the source said.

In general, thanks to the measures taken, the share of the "gray" market fell by half from about 80 percent, the source said.

"This has had a positive impact on the growth of official supply of devices within the price segment up to $400. The growth was about 20 percent,” the source said.

“However, this almost did not affect the "gray" supply in the high price segment. The fact is that the duty in the amount of 150 manats for mobile devices, the cost of which exceeds $1,000, does not make much difference for the market, as the amount of 150 manats is not so significant as compared to its US dollar equivalent,” the source added.

“Officially, the customs clearance of the high-price segment, plus VAT costs the official import channels about 30 percent of the cost of the smart-phone, that is about $ 150, which costs more in mantas,” the source noted.

“That is, a big difference is obtained. Therefore, mobile devices of the high price segment are less protected from "gray" supplies than the devices of the middle and low price segments,” the source continued.

“In general, the increase in the cost of registration of devices did not contribute to the increase in their cost in retail market, even despite the fact that in addition to VAT, the official suppliers have to pay twice the cost of registration and IMEI-codes for phones with dual SIM card slots (1.6 manats for each IMEI-code of the device)," the source concluded.

The official exchange rate on September 22 is 1.7 AZN/USD

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Follow the author on Twitter: @h_veliyev

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