Telcos too have to cut VAT on internet use: NBR | The Daily Star
12:00 AM, July 27, 2018 / LAST MODIFIED: 12:06 AM, July 27, 2018

Telcos too have to cut VAT on internet use: NBR

The tax administrator has asked the telecom operators for the fast implementation of the 10 percentage points cut in value-added tax on internet use at the end-user level.

The National Board of Revenue lowered the VAT on internet use from 15 percent to 5 percent on July 1.

But the mobile phone operators did not implement the rate, as they say that they do not belong to the category of “internet organisations” which are mandated to reduce the VAT.

On Wednesday, the NBR issued a letter to the Association of Mobile Telecom Operators of Bangladesh. In the letter, it said the telecom operators should also implement the reduced rate, said a top official of the NBR's VAT regulation division.

Internet service providers have reduced the VAT as soon as the new order came. The Bangladesh Telecommunication Regulatory Commission (BTRC) ordered the telecom operators twice to cut the VAT but they did not pay heed to the call.

The telecom operators used to get a rebate for the 15 percent VAT they realise from the mobile users. But there will be no rebate if the VAT is reduced to 5 percent, which will increase the cost of doing business for the operators and the end-users will have to bear the burden, said a top official of the NBR.

However, the NBR is yet to take any decision on what measures will be taken for the extra VAT the mobile phone operators have so far charged till July 1.

The government earns about Tk 1,100 crore from VAT on internet use every year. As of June, there are 8.97 crore active mobile internet connections and 56.85 lakh broadband connections, according to the BTRC.

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