The mobile phone operators want no value added tax (Vat) on their service as the Internet use is poised for a “revolution” in Bangladesh with the launch of the third generation (3G) and mobile financial services.
The demand came as Association of Mobile Telecom Operators of Bangladesh (Amtob) placed their budget proposals recently at a pre-budget meet with National Board of Revenue.
Amtob said the government could see 2-4% jump in economic growth if all people have access to mobile service and 3G mobile broadband.
“If data use increases, the country can reach its digitalisation goal even before 2021 where Internet will be the key driver taking the country towards its destination,” TIM Nurul Kabir, secretary general of Amtob told the Dhaka Tribune yesterday.
“The mobile operators are now launching campaign ‘Internet for All’ after 3G comes to market. Internet is the thing which can most benefit people now.”
According to Amtob, if 10% of 2G subscribers shift to 3G service, per capita GDP will increase by 0.15%.
The association also proposed withdrawal of Vat and other taxes from Internet modems which are mostly used by the rural population for having access to data usage.
“Internet modem is an unparalleled mean for boosting internet use by involving mass population,” Amtob proposals paper reads.
“Like mobile handset, Vat on modem should be exempted in all stages which will expedite the implementation of Vision 2021 through digitalisation– and reciprocally increase NBR revenue by a good deal from this source.” Amtob said present ATV rate is 4% at import stage, Vat at supply stage is 4% and Vat at the selling stage to customers is 15% or 4% (subject to 26.67% value addition).
According to mobile operators’ platform, despite the availability of high speed data after 3G is introduced, the data market has not expanded to the expectation due to lack of affordable modems.
It said the data use is still below what was expected after the launch of wireless broadband.
The association further proposed withdrawing 15% Vat from mobile financial services as the Vat is paid ultimately by the service recipients.
Mobile financial services are an invention of the modern world which will boost up the financial sector through ensuring engagement of mass population, said Amtob.
“Government should suspend Vat collection, especially from these two (modem and mobile financial service) at least for now. It will help expand data service and benefit the people,” said Nurul Kabir.
Further, Amtob reiterated a long-standing demand of withdrawing tax from SIM cards. If SIM tax becomes zero by 2015, the tele-density will increase to 85% from 72% now, said Amtob.
It also said the mobile connectivity will help about 97% of total population, who are yet to come within banking service, have the facility of banking and financial services including the receiving of remittance.
