Surcharge imposed on mobile talk
The cabinet yesterday approved a new draft law that would impose one percent surcharge on the use of mobile phone -- a move that drew mixed reactions from subscribers.
Once the law is passed in parliament, the subscribers, whose number currently stands at 12.18 crore, will see deduction of one taka from every Tk 100 use of any kind.
The government would spend the money to be collected as surcharge for development in education and health sectors, said Cabinet Secretary M Musharraf Hossain Bhuiyan after approval of the draft law at a weekly meeting.
The new surcharge is going to put extra pressure on cellphone users, who already pay 15 percent value added tax on their bills.
Due to the VAT, a user actually gets talk time of Tk 85 against a top-up of Tk 100 as Tk 15 is deducted by the operators. The surcharge after imposition will leave the users with Tk 84 talk time.
Some mobile phone users have supported the move saying many people would be benefited if the surcharge was properly used for public health and education.
On the other side, others said it would put extra pressure on low-income group such as small farmers, industrial workers and day labourers who recharge very small amount of money.
"It is a good cause that the government will use the money for health and education purpose. It will benefit many poor people," said Mohammad Motaleb, a farmer from Kaunia, Rangpur, over the phone.
"But the present VAT rate is too high. The government should reduce the VAT
on mobile phone use," he said, adding that the VAT rate cut would be helpful in the face of rising electricity tariff and transport costs.
Md Shihab Uddin, who works at a private firm in Dhaka, was sceptical about the use of the surcharge money. "We suffer from load-shedding even after several hikes in electricity tariff," he observed.
“Instead of slapping surcharge on everyone, the government could impose it on those, who spent higher on mobile phones," he said, adding that imposition of surcharge in slabs would give respite to those subscribers, who spent Tk 100-150 a month.
Cabinet Secretary Bhuiyan said the government could collect Tk 140 crore a year through the surcharge on mobile phone use.
The proposed surcharge on Subscriber Identity Module (SIM) or Removable User Identity Module (RUIM) cards would be collected from the mobile phone operators, he added.
The cabinet secretary further said mobile users would not have to pay much. If any customer paid Tk 1,000 as call charge, they would have to pay only Tk 10 as surcharge, he argued.
He also said the amount to be paid as surcharge was very nominal compared to the revenue the government earned from the mobile operators at present.
The move to impose surcharge on all types of use of mobile phone by framing a law came after the government had imposed surcharges on tobacco, environment-polluting firms and mobile phone handsets in the budget of the current fiscal year 2014-15.
Earlier, the National Board of Revenue (NBR), based on the prime minister's suggestion, took an initiative to slap surcharge on mobile phone use. But the law ministry came up with a view that it would be better if the surcharge was imposed through a separate legal structure, said Bhuiyan.
The draft law, "Development Surcharge and Levy (impose and collection) Act, 2015" provides scopes for amending or changing the existing charge and imposing new surcharge in future if the government wants.
As per the proposed law, a schedule would be there to determine in which rate and on which services development surcharge and levy would be imposed and collected, he informed.
The government could amend this schedule from time to time as well as could change the rate of surcharge or incorporate new issues through gazette notifications, he added.
The surcharge on mobile phone use would be imposed after the passage of the law in parliament, said a senior official of NBR seeking to remain unnamed.
As per a plan, the surcharge will be on airtime (talk time), short message service and other services enjoyed by the subscribers.
The government steps to impose new tax on mobile phone came when tele-density is rising fast due to increased mobile phone subscription. The number of Internet users through mobile phone is also growing, thanks to an increased use of smartphones.
Ahsan H Mansur, executive director of Policy Research Institute, also criticised the NBR for its plan. "It is a bad idea. They are already charging VAT. Why should they need to impose a surcharge?" he questioned.
"My main objection is that it will undermine growth of the broader economy as the sector is very pro-growth. Enhanced use of mobile phone reduces cost of doing business and allows people to avoid unnecessary troubles," he observed.
From fish trading to education and large business houses, mobile phones were used in all sectors, he said. "This kind of surcharge will discourage broadening of telecom in all economic activities including education and research. It will be against trade and economy."
He also said the surcharge would not help the education sector, which would be internet-based in future when more data would be downloaded through mobile phones.
"This surcharge can be applied to sectors which are engaged in harmful activities related to environment or health. But not for telecom, IT and other socially desirable activities," Mansur observed.
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