Retail prices of high-end mobile phones could soar if EU proposals to place import taxes on handsets are imposed.
According to reports the EU is mulling imposing a tax of up to 14 per cent on phones which have GPS, a personal digital assistant, radio, camera and television.
At present mobile phones are exempt from the tax under the Information Technology Agreement of 1996.
However with the advent of new handsets with extra features, the European Commission has been moved to consider reclassifying high-end phones, thus endangering their duty-free status.
Should the proposals become law experts predict that it could see the cost of handsets rise by as much as a quarter and could heavily hit sales at a time when consumer budgets are under strain.
Manufacturers have responded critically to the news and have reserved particular disdain for the timing of the proposed tax.
Simone Bresi-Ando, a spokesperson for Sony Ericsson, told the Times: “These new duties would inevitably lead to a high increase in consumer pricing at a time where we are all struggling to keep prices as low as possible.”