The Finance Ministry had levied an 18 percent customs duty if returnee migrant workers were found to have brought more than one handheld device from abroad. Nepali migrant workers abroad launched a ‘no remittance’ campaign on social media, stating they will stop sending remittances to Nepal to protest the rule.
According to Punya Bikram Khadka, Spokesperson at Department of Customs (DoC), the new arrangement will come into effect once DoC receives the cabinet decision in written form. The cabinet decision will be published in the Nepal Gazette first. "Once it is published, we will start the implementation," he said. NTA Chairman Purusottam Khanal said that the authority will now move toward the implementation of MDMS. "Since the cabinet has amended the Baggage Rule, we are technically ready to implement the system," he said. Once the MDMS is implemented, NTA can block smartphones that have been brought to Nepal without customs clearance. MDMS has been expected to end the import of ‘gray’ mobile sets as the authority can block such smartphones. According to mobile phone importers, around 30-40 percent of the smartphone market in Nepal is of ‘gray’ handsets with about Rs 12-15bn worth of mobile devices imported to Nepal illegally every year. The enforcement of MDMS has come at a time when the domestic mobile phone market is going through a slowdown. “The MDMS implementation could provide some respite to handset dealers,” said Deepak Malhotra, President of Mobile Phone Importers’ Association. According to him, it is high time that the government enforces the mechanism effectively. The domestic mobile phone business is currently going through a lean patch with a slowdown in demand as sales have fallen by more than 40 percent, say importers. According to them, mid-range phones dominate the market and even that segment is not doing well currently. They say it is the government that will also benefit from the implementation of MDMS as all types of imports will become legal and more revenue will be added to the state coffers. MDMS is a security system that enables NTA to implement policies that secure, monitor, and manage end-user mobile devices. It is expected that once MDMS comes into force, the sales of ‘gray’ devices in the market will stop as SIM cards on unregistered phone sets will not work. NTA has built a centralized system that keeps a record of mobile phones after their International Mobile Equipment Identity (IMEI) number is registered with it. Every mobile phone has a unique 15-digit IMEI number and such numbers of officially imported mobile phones are initially registered by the importing company. As per the law, the telecom regulator has to provide a type approval for the phones before the handsets are imported. The existing arrangements allow NTA to determine the genuineness of mobile handsets in the country by examining their IMEI numbers.
