Imports of computers into Bangladesh have been exempt from tax since 1997, in an attempt to encourage growth of the country's IT sector.

But in his budget earlier this month, Finance Minister Saifur Rahman proposed to introduce a 7.5% duty on all imports.

He said some dishonest traders were importing computers into Bangladesh with the aim of smuggling them out to other countries and therefore the country was loosing out on foreign exchange.

Singapore, Malaysia and India are the main sources of computer imports into Bangladesh.

Bad news for students

Mohammad Sabur Khan, president of Bangladesh Computer Samity, told the BBC's World Business Report he hadn't seen proof of any smuggling operations.

Rahman: proposes a 7.5% duty on imports

He said he had also spoken to journalists and the National Board of Revenue and neither had seen evidence of smuggling.

Mr Khan said he expected to see a 25% fall in computer sales following the introduction of the new duty and he warned it won't only be businesses that suffer.

The added duty will cause user levels to fall and may cause the many students who are currently eager to buy computers to reconsider, he added.

Bangladesh's parliament is expected to adopt the new budget on 29 June 2002.