Why will Algerians pay more for their smartphones from 2020?

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The price of smartphones mounted in Algeria will rise sharply in 2020 following the government’s decision to impose on operators “SKD / CKD component import taxes”, as well as the removal of the tax benefits they previously enjoyed.

As of January 1, 2020, Algerians will pay more for their smartphones following the decision of the Ministry of Industry and Mines to exclude from the finance law 2020 the assembly of mobile phones kit import device SKD / CKD (Semi Knocked-Down and Completely Knocked-Down), pre-assembled and field-assembled.
“There is no question of freezing this activity,” said a source in the ministry cited by the Algerian Press Service (APS). “It’s just that the finance bill for 2020 excludes the mounting of the mobile phone import device SKD / CKD collections offering benefits to investors in the assembly, including automotive, home appliances and electronics, “she added.

Thus, from the entry into force of this law, telephone operators such as Condor, Huawei and Iris who wish to produce smartphones in Algeria will have to pay “import taxes of components without benefits as it is the case for the aforementioned industrial assemblies (automobile, electronics and appliances, ed), “said the ministerial source.

The obligation to pay these import taxes will have inevitable consequences on the final price of mobile phones “which will certainly increase,” according to another source from the Ministry of Industry quoted by private channel Ennahar TV.

Why this decision?

The decision of the Algerian authorities to reduce imports was motivated by the merging of foreign exchange reserves following the fall in oil prices in 2014. The Algerian government intends to encourage the local industry.
In this context, the same source told the APS that “this activity (local mounting of smartphones, note) does not encourage the integration (industrial, ed) national, and that to charge the import of these components is very important. “Even developed countries are no longer, or almost no longer, mounting mobile telephony on their soil,” she argued.

In addition, the official said that the Ministry of Industry had made this decision on the basis of “two years of observation of the activity in question and the finding that it is in most cases importation of disguised finished products.

The Algerian government has also set quotas for car manufacturers in 2019 for imports of SKDs, leading several international groups – Kia Motors, Hyundai, Volkswagen and Renault – to freeze their activities in recent weeks.

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