Air conditioning market to stumble on proposed import duty hikes, traders say
They warned that the increased duties will negatively impact businesses and consumers, reduce government revenue, and lead to higher electricity consumption.
Leaders of the Bangladesh Refrigeration and Airconditioning Merchants Association have raised concerns over the government's move to raise the import duty on the central air conditioning systems and compressors by 49% to 60% in the proposed FY25 budget.
They warned that the increased duties will negatively impact businesses and consumers, reduce government revenue, and lead to higher electricity consumption.
"If the duty is not reinstated to 11% as before, it will hinder the sector's growth and could result in bankruptcy for investors and traders," said president of the association, Mohammad Asaduzzaman, at a post-budget press conference on Wednesday.
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As keynote speaker, Asaduzzaman further said the central air conditioning systems or, variable refrigerant flow (VRF) and variable refrigerant volume (VRV) systems, represent the most advanced, energy-efficient, space-saving, and environmentally friendly refrigeration technology available both in Bangladesh and globally.
"These systems have been imported for many years to serve various public and private sector needs."
Asaduzzaman pointed out that the central air conditioning systems, typically 2,10,000 BTU (17.5, 19 and 21 tonnes) per unit, are widely used in residential buildings, hospitals, commercial buildings, and government projects across Bangladesh.
These units are designed for ease of use, space efficiency, and energy conservation due to their inverter technology, he said.
Terming the government's move to raise the import duty to 60% as unreasonable, he said if this is implemented, entrepreneurs of the air conditioning market worth of Tk2,000 crore will suffer, and investors will be discouraged.
He said more than one lakh people are directly engaged in the air conditioning industry, while traders have already made significant capital investments to import central air conditioning systems.
At present, air conditioning systems from brands such as Panasonic, Daikin, Mitsubishi, Hitachi, and Toshiba are popular choices among consumers in the Bangladesh market.
Asaduzzaman further said if the price of AC used in hospitals, markets and commercial buildings escalates, common people will inevitably bear the brunt of the increase.
Md Akram Hossain, vice president of the association and MA Sayed, chairman and managing director of AC World, among others, were present at the briefing.
