The 5% hike in the supplementary duty (SD) on mobile phone services, namely voice and data in the proposed budget for FY21 is contradictory to the vision of Digital Bangladesh, said Syed Almas Kabir, president of Bangladesh Association of Software and Information Services (BASIS), in a post budget reaction to Dhaka Tribune.
"The government should not hike the SD on mobile phone use as we are moving towards Digital Bangladesh," he remarked.
The duty hike could hurt rather than benefit the government because people may cut their consumption, he also said.
Currently, in addition to the SD, mobile users pay a 15% value added tax (VAT) and 1% surcharge on talk-time and messaging services, while the VAT on mobile internet is 5%.
The government first imposed a 3% SD on voice, internet, SMS, and other mobile phone services in FY16, which was increased to 5% in FY17 and 10% in FY20.
"For the ICT sector, we demanded a separate stimulus package worth Tk5,000 crore, but we did not see any announcement for it in the proposed budget," said BASIS president.
Though the government has already declared stimulus packages worth over Tk1,00,000 crore to tackle the Covid-19 fallout impacting the country's economy, ICT companies might not be able to comply with the banks' demands, he lamented.
There is a different kind of VAT in the broadband internet related sector, the government should reform the VAT system in those sectors to develop the ICT industry, said Almas, also the CEO of MetroNet Bangladesh Ltd.
Internet services and digital transactions should be VAT-less as government investment for the ICT sector, the BASIS president pointed out.