The budgetary proposal for fiscal year 2024-25 to hike supplementary duty on mobile top-ups alongside VAT on SIM cards will negatively impact consumers and the industry, said mobile operators yesterday.

The supplementary duty has been raised from 15 percent to 20 percent while the VAT from Tk 200 to Tk 300.

Due to the duty hike, customers will have to pay Tk 139 to avail mobile services worth Tk 100, one of the costliest ratio in the world, said the operators.

Historically, high prices have compelled customers to reduce mobile phone usage, which has resulted in a decline in the government's revenue collection, they said.

Additionally, the rise in VAT may hinder the growth of new mobile subscribers, they added.

The changes, combined with high inflation, could further hinder industry growth and innovation, they told a post-budget press meet at the office of the Association of Mobile Telecom Operators of Bangladesh (Amtob) in the city.

Taimur Rahman, chief corporate and regulatory affairs officer of Banglalink, Shahed Alam, chief corporate and regulatory affairs officer of Robi Axiata, Hans Martin Henrichsen, chief corporate affairs officer of Grameenphone, and Mohammad Zulfikar, secretary general of Amtob, were present.

Amtob said 40 percent to 45 percent of the country's population are yet to be connected through mobile phones despite all the progress in the government's target to achieve a "Smart Bangladesh".

Compared with neighbouring countries, Bangladesh lags significantly in data usage at the customer level. However, there is substantial potential for revenue growth along with customer growth in this sector, it said.

Currently, a mobile internet customer in Bangladesh uses 6.5GB of data on an average per month, compared to anywhere from 27GB to 29GB in neighbouring India, it said.

Among current mobile service users, 63 percent use mobile internet and 54 percent are 4G subscribers, it added.

This indicates that a significant portion of current users – 37 percent -- does not use mobile internet services and 46 percent are not yet using 4G services, it said.

"Therefore, there is considerable potential for revenue growth in this sector," said Amtob in a press release.

"The current policy contradicts the vision of Smart Bangladesh," it said.

"Thus, a rational tax structure is essential to accelerate economic growth through the continued development of mobile services and increased mobile internet usage at the consumer level," said Amtob.