Finance Minister AMA Muhith has proposed to impose a 5% supplementary duty on services provided through mobile communication in the budget of FY 2015-16.
He also proposed to reduce tax on mobile SIM and RIM cards in the budget.
“With a view to ensuring the continued development of the mobile sector, the government is making such proposals to make the IT service easily attainable through mobile phone,” the minister said during the budget speech at Jatiya Sangsad yesterday.
Currently, mobile operators are paying Tk300 as tax on subscriber identification module (SIM) cards and removable user identity module (RIM) cards, including Tk109.96 as value added tax (VAT) and Tk190.05 as supplementary duty.
The issuance and replacement tax of SIM and RIM cards currently stands at Tk300 and Tk100, respectively.
Muhith proposed to fix Tk100 as both issuance and replacement tax for the modules.
The proposal of SIM and RIM tax reduction was welcomed by mobile operators.
“The decision to reduce SIM tax is an important step to improve mobile connectivity in Bangladesh. While we hoped for a total elimination of the SIM tax, reduction would certainly complement the initiatives and incentives to achieve the vision of Digital Bangladesh of the government,” said Ekram Kabir, vice-president at Robi Axiata Limited.
Earlier, mobile operators in the country urged the National Board of Revenue (NBR) to eliminate the Tk300 tax on SIM and RIM cards and withdraw the replacement tax to ensure the growth of the telecom sector.
Leaders at the Association of Mobile Telecom Operators of Bangladesh argued that the existing SIM tax was not only a hindrance to the growth of the mobile sector, but also contradictory to the government’s vision for establishing a Digital Bangladesh.
However, telecom experts said the 5% supplementary duty may do more harm than good.
Ekram Kabir said: “We are concerned that the imposition of 5% supplementary duty on mobile services would be burdened on our valued subscribers, which may eventually dent the total revenue of the industry.”
Senior Policy fellow of LIRNEasia Abu Saeed Khan told the Dhaka Tribune that it would be a punishment for the mobile phone users as it would not improve the quality of services and the operators would not reduce their profit margin.
ICT expert Mostafa Jabber, mobile operator Banglalink’s Chief Commercial Officer Shihab Ahmed and Grameenphone Limited’s Head of External Communications Sayed Talat Kamal also criticised the proposal of imposing the supplementary duty on mobile services.
