Internet providers threaten to suspend service if VAT not revised
03:24 PM, July 04, 2020 / LAST MODIFIED: 03:34 PM, July 04, 2020

Internet providers threaten to suspend service if VAT not revised

The Internet Service Providers Association of Bangladesh (ISPAB) today threatened to suspend internet connections across the country "for hours" if double-layer value added tax (VAT), which they said increased their cost about 30 percent, is not revised.

In a virtual press conference, president of the organisation, MA Hakim, said they have no option but to increase user-level charges if the VAT policy is not be revised.

"We have no intention of increasing the fees as the internet is now a basic need for people, but our backs are against the wall," said Hakim.

The association will wait for the call from the government side in July and they will move on with their course of action after discussing with their members, Hakim added.

"The shutdown can be one or two hours every week, which will continue," he added.

Imdadul Haque, general secretary of the ISPAB, said for the sake of their survival, they will have no other way but to increase the service charges at user-level or compromise the service quality.

"We are yet to set our course of action but this time we have to adopt a hard line," Haque said.

The ISPAB said they have contacted both the telecom minister and ICT state minister, who have also agreed with them.

Currently internet service providers are collecting 5 percent VAT from the end users but they have to pay 15 percent VAT on two separate layers for purchasing wholesale bandwidth and connectivity.

As VAT rates are different, they are not getting rebates from the national board of revenue.

The government should withdraw the VAT in all segments or make it 15 percent for all, they demanded.

"If government does not address our logical demand, we will have no other way but to consider increase in charges and that could be 30 to 40 percent," said Hakim.

This would mean, users who are enjoying a Tk 1,000 package, which is the most popular, will have to pay Tk 1,300 after August, he added.

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