Tax on mobile usage

The proposed 'tax at source' for both prepaid and post-paid users @2% has created some consternation among end-users and policymakers alike. This new tax envisages a deduction of Tk2.00 on every recharge of Tk100.00 for prepaid users and an additional 2% levy on top of the VATcharged@15% for post-paid users.
Moving beyond the legalities involved in whether at all this new levy can be termed 'tax at source' since it is in effect taxation on expenditure rather than income; today the cell phone can hardly be called a 'luxury' item. On the contrary, consumers utilise mobile phones for a variety of economic activities and availing essential services that have far reaching socio-economic impact on the rural economy. The rural populace use mobile services to gather information on market price of various inputs and outputs. Such information help farmers get right price for their agro-commodities and reduce risk of getting swindled by middlemen; the rural youth do not necessarily have access to the major national newspapers, but can get access to information about job opportunities using mobile value added services. All these constitute direct and indirect monetary benefits that come from availing mobile services offered by the telecom industry. Looking beyond economic benefits, mobile phone users benefit socially, i.e. access to information on health issues are available and with millions of expatriate Bangladeshi workers living in far off lands, the mobile phone plays an essential role in maintaining communication.
The proliferation of mobile phones in a relatively low Tele-density country like Bangladesh has made it possible for people of lower-income brackets to bring about significant changes in their lives. For farmers it has meant fetching better prices of agro-products, for others, the cell phone has helped reduce costs associated with communication and health treatment. The question being asked today is whether such levy will encourage the 90 million users to use their phones more sparingly, which in effect would threaten the government's existing significant earnings from the hefty VAT charges that have been in effect for some years now.