Sri Lanka’s heavy import tax structure on electronic goods has spawned a large grey market, with one industry player estimating it to be thrice as big as the legitimate market.
K.Shankar Narayan, Samsung’s Country head in Sri Lanka told The Sunday Leader on Monday that while the value of the total market was around U.S.$ 500-600 million annually, the legitimate market was a mere U.S.$ 150-200 million. He was referring to the consumer electronics (including white goods), I.T. (such as notebooks) and telecoms (mobile phones), covering Samsung Electronics product range.
“For instance import duties and taxes on digital cameras are as high as 80%,” said Narayan. They were talking with the authorities to lower the duty structure and the talks are positive, he said. Changes to the duty structure may take place at this month’s budget, said Narayan. The duty and taxes on mobile phones were 16.5%
He further said that due to the downturn in the local and global economies last year, sales were 10-20% of the annual average. However sales in the market in the first quarter of this year were equivalent to the total sales made last year, Narayan said.
The company which has only a 7% market share in flat T.V.s, the leader being Singer with a 30% market share, followed by L.G., with Samsung in 4th place, has ambitious plans to be the market leader in this segment before the year end, with plans to open a liaison office in Colombo headed by Narayan soon. It launched its 3D LED T.V.s to the local market on Monday.
The T.V.s will also be sold through Softlogic, the mobile phones through Singer and so on, said Narayan.
Meanwhile with most of Samsung’s consumer electronic goods manufactured in its factories in India, there was no threat in the breakdown in supplies in the event the two Koreas went to war, its Regional President JungSoo Shin told this newspaper. Other than from India, Samsung’s products are rolled out into the local market from its factories in China, Malaysia and Korea as well.
Business Editor’s Note: The Government on Tuesday brought down the import taxes of certain items. Those included digitial cameras and mobile phones. (See also page 25)
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