We fully endorse the state minister for telecommunication's call to do away with the supplementary duties (SD) on telecom services, particularly on voice and data. The users, and there are more than 132 million of them in this country, are already paying 15 percent value added tax and a 1 percent surcharge. And the SD has been upped from 3 percent to 5 by the NBR on June 3.
We feel the proposed SD will hit the lower and middle income and poorer groups hardest in the long run; for these people, who are not in the personal income paying tax bracket, mobile phone is no longer a luxury.
While one understands the finance minister's compulsion to finance a highly ambitious budget, the consequences of a rise in taxes and duties in this sector will be quite far reaching. A three percent increase on the face of it might not appear too big but when contexualised, in terms of services gained for every taka spent, for example, in refilling one's mobile phone, a user will get only 80 paisa worth of services. The increase will also adversely impact the government's effort of digitisation.
What is also surprising in this context is the implementation of the proposal by the NBR through its order of June 3 even before the budget has been passed. The proposal is still to be thrashed out, as are all other tax proposals, before being approved by the parliament and the rush on the part of the board of revenue is not understood. What if the proposal is altered or indeed scrapped altogether come June 30 2016?