• Saturday, November 29, 2014

Mobile talk to become costlier

1pc surcharge from next month

Abdullah Mamun

The use of mobile phones is set to become dearer with the tax authority's intent to introduce a 1 percent surcharge from September.

“We are trying our best to implement the surcharge as soon as possible. It will probably be from September 1, as almost all the preparations are complete,” said Ghulam Hussain, chairman of the National Board of Revenue yesterday.

To implement the surcharge, the NBR does not need to take the matter through parliament as it was already discussed in the budget session, he said, adding that only approvals from the finance and law ministries are needed.

The latest surcharge, which follows the 1 percent surcharge slapped at the beginning of the year on mobile handset sales, will be an add-on to the 15 percent value-added tax that mobile subscribers currently pay, and will be applicable on voice calls, text and multimedia messages and data.

For instance, currently, when a user puts Tk 100 into his/her account, he/she gets credit for Tk 85 and not Tk 100; Tk 15 is deducted as VAT.

Now, with the introduction of surcharge, another Tk 1 would be taken off the recharge amount. In other words, he/she would get credit of Tk 84.

“The impact of the 1 percent surcharge would be negligible for the consumers -- Tk 1 of Tk 100 is too little,” Hussain said.

But the benefits from the surcharge are “huge”, as Tk 500-700 crore will go to the state coffers a year, to be used for educational purpose, according to Hussain.

He said an educational fund will be created with a different economic code and a separate rule drafted for it.

Analysts and mobile operators, though, opposed the NBR move, as it will reduce mobile phone use for all economic activities and undermine the growth of broader economy.

Earlier, Ahsan H Mansur, executive director of Policy Research Institute, said: “It is a bad idea. They are already charging VAT, so why should they impose another surcharge?”

His main objection is that it will undermine the growth of the broader economy: the use of mobile phones reduces the cost of doing business and facilitates economic activities.

As of June, there are 11.65 crore mobile phone subscribers, 48.45 lakh of them accessing the internet from their handsets, according to the Bangladesh Telecommunication Regulatory Commission.

On July 8, TIM Nurul Kabir, secretary general of the Association of Mobile Telecom Operators of Bangladesh, said the surcharge will hinder growth of the sector and undermine the government's vision for a digital Bangladesh.

He said the government could find other innovative ways to increase revenue from the sector, which has so far paid Tk 71,000 crore in taxes.

Published: 12:01 am Tuesday, August 19, 2014

Last modified: 9:59 pm Tuesday, August 19, 2014

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