The mobile phone companies argue that reducing taxes will make legally imported phones more attractive than the cheaper smuggled models. Consumers can save about forty dollars by buying what many call “a hand luggage phone” carried into the country tax free. They're often sold by the same shops which stock the legally imported models.
The telecoms ministry says that last year there were more than seven hundred thousand phones sold in Vietnam. Two thirds of them had been smuggled in. But Nokia, which sells some of the most popular phones, estimates that figure has jumped. Company officials say that even more smugglers have entered the market, since the principals of a major distributor, Doug Nam Associates, were prosecuted for a multi-million dollar tax fraud.