Tax on digital service contradicts policy
A consumer rights body yesterday called for withdrawal of the supplementary duty on mobile phone use as the tax goes against the government’s telecom and ICT policies and the Digital Bangladesh agenda.
In a press conference at Dhaka Reporters’ Unity, Bangladesh Mobile Phone Consumers Association said many services have been introduced in the country like ride-sharing and digital commerce which have generated a huge number of jobs.
On Thursday, the finance minister, while unveiling his maiden budget, increased the SD on the overall mobile phone use to 10 percent from 5 percent and the customs duty on smartphone import to 25 from 10 percent.
He also imposed a 7.5 percent value-added tax (VAT) on virtual business, which includes ride-sharing and e-commerce.
The association says the taxes on the digital services were increased and imposed without taking into account the overall consequence.
“Wholesale tax increases will hinder the digitalisation of the country,” said Mohiuddin Ahmed, president of the association.
“This goes against the government’s digitalisation agenda.”
Owing to the new tax, customers will now have to pay 27.77 percent in taxes of the services provided through mobile phones. Users also pay a 15 percent value-added tax and 1 percent surcharge on phone bills.
On Thursday, the National Board of Revenue issued a statutory regulatory order and mobile phone operators reacted straightaway by raising the charges.
“It is easy to collect handsome revenue from the digital industry with less effort and that’s why the government sees it as one of its cash cows,” Ahmed said.
The finance minister has also proposed to raise the minimum tax on turnover for mobile companies to 2 percent from 0.75 percent.
“The government has allocated a huge amount of money for different ministries and increased the allocation for the telecom and ICT divisions. But, it has not allocated any money for Teletalk,” Ahmed said.
Raising the SIM tax from Tk 100 to Tk 200 will double the burden for the industry in case of giving new connection, according to Ahmed.
Zonayed Saki, a politician, and Abu Naser Khan, chairman of the Poribesh Bachao Andolon, were present.