The proposed budget is going to cost the cellphone users as the finance minister has proposed to hike 5% Value Added Tax from the previous 10% on mobile handset import and introduce Tk100 as tax on per SIM replacement.
On the other hand the budget failed to come up to the expectations of mobile phone operators that had long been demanding reduction in corporate taxes.
The ICT industry also witnessed minimum initiatives in the budget for reducing internet price.
In his 2014-15 fiscal budget speech at the parliament yesterday, Finance Minister Abul Maal Abdul Muhith said he had plan to protect local mobile phone set assembling companies.
However, the handset industry claimed that there was not a single local assembling company.
Muhith said: “In order to balance out VAT on the handset assembling stage and imports, I propose to impose 15% VAT on the import of mobile phone set.”
He said some companies were assembling quality mobile phones in the country and paying 15% VAT while there was only 10% VAT on the import of mobile phones.
This created an uneven pay of VAT, which needed to be eradicated, he added in his budget speech.
Uday Hakim, director (operation) of a local brand handset company Walton, claimed that there was not a single company assembling handsets in the country.
“I am pretty sure that if the proposal is passed, it will not be cost effective for the users.” He suggested the government rethink its proposal.
If the government really wanted to crate entrepreneurship in the local handset industries it should reduce import duty on handset accessories, added Hakim.
Currently duties on handset accessories were at least 58%, he said, adding that despite modern setup, Walton also imported finished handset products from abroad because of cost effectiveness.
TIM Nurul Kabir, secretary general of Association of Mobile Telecom Operators of Bangladesh, expressed disappointment over the proposed budget.
He said it would create an uncongenial atmosphere for the service providers as well as the users.
“Cellphone is nowadays not a luxurious product, he said, calling upon the government to rethink the proposed SIM replacement tax, plus 5% hike in VAT on handset import.”
Nurul recommends that the government withdraw the SIM tax, which is now Tk300 for per SIM, to earn more money.
The finance minister has proposed deduction of 5% supplementary duty on SIM which is currently 20%.
But market sources say it will not do them any good as the mobile operators are buying most SIMs from the local markets and importing only a very little number of them.
Akhtaruzzaman Manju, president of Internet Service Provider’s Association of Bangladesh, also expressed dissatisfaction over the budget proposal though the finance minister proposed 5% custom duty on multiplexer.
“Multiplexer is a very minor product. If the government wants to reduce the internet price, VAT reduction is a must,” he told the Dhaka Tribune.
Muhith in his budget speech also emphasised digitisation.
He said: “In the present tenure of our government, we will accelerate the development of Hi-tech Park, Software Technology Park, ICT Incubator and Computer Village.”
He also informed the house that currently the programme to transform 8,000 rural post offices and 500 union post offices into E-centres was underway.
The minister claimed that Bangladesh held the highest position in South Asia in terms of using information technology in education, banking, medical, business and commerce and mass media sectors.
Because of an enabling environment and infrastructure for ICT, Bangladesh had already reached the threshold for becoming a technology-driven modern state, he said.
Muhith informed the House that every day on an average 40 lakh people were getting e-services from 4,526 Union Information Centres.
“Tele-density and internet-density had gone up to 77.8% and 23.7% respectively,” he said.
The minister claimed that the coverage of e-commerce, e-payment and e-governance expanded substantially and moreover, Bangladeshi software and ICT services were being exported to 30 countries including USA, Canada, Japan, Australia and several European countries.
The allocation for ICT development project was Tk3,229 crore in the proposed budget which was around Tk3,176 crore earlier.
