Budget for FY 2018-19

15pc VAT on internet use likely to be removed in next budget

The posts and telecommunications and information and communication technology (ICT) minister, Mustafa Jabbar, said he expects good news for the telecom industry in the next budget.

“The internet is the driving force nowadays, and it is a long-standing demand of ICT trade bodies to remove or erase the 15 per cent value-added tax on internet use. Their demand is expected to be met in the upcoming budget,” the minister said.

The cost of internet use will come down if the 15 per cent VAT is removed, he added.

Telecom operators, however, said the government has to pay more attention to the ICT sector as it is a new sector. E-commerce-based entrepreneurs said they face a lot of problems to run their businesses, and require policy support.   

The Association of Mobile Telecom Operators of Bangladesh (AMTOB) recently placed a set of proposals on the budget before the National Board of Revenue (NBR).

In the budget proposal, the association said the mobile phone operators invested a lot of money, even though all except Grameenphone could not make profits. The operators have to pay a lot for different kinds of taxes. They are investing a lot of money to build a network but could not make profits because the desired customer base has not been created, the association said.

The association wanted the corporate tax on earnings of publicly listed and non-listed companies be brought down from 40 and 45 percent respectively to 25 and 35 percent.

At present, mobile phone operators are supposed to pay Tk. 100 while issuing a new SIM. If the SIM is lost or damaged, the consumer has pay a tax of Tk. 100 for replacement. They demanded that the tax be scrapped in the next budget.

The association’s proposal said the applicable 21.75 per cent tax on mobile internet use should be withdrawn so that mobile internet prices can be slashed, making its prices consistent with broadband price.

The representatives of the telecom sector objected to the payment of supplementary duties and surcharges on mobile talktime. This kind of surge charges is not logical, they argued.

Finance minister AMA Muhith has already hinted at a cut in corporate tax in the upcoming budget, admitting that the rates are much higher in Bangladesh.

Bangladesh Association of Software and Information Services (BASIS) president Syed Almus Kabir said the software companies have to pay 10 per cent tax while exporting software even though the government has declared a tax holiday for the ICT sector. This is caused by an ambiguity in respect of tax holiday, he pointed out. He demanded a clear set of guidelines for a tax holiday. “Software companies, software developers and companies, and all information technology-related companies use the internet as raw materials but we have to pay 15 per cent VAT.” He added that prices of different kinds of products used in the sector have gone up.

Amtob secretary TIM Nurul Kabir demanded the publication of a set of guidelines for the e-commerce sector to ensure that the promising sector flourishes.

Budget for FY 2018-19

15pc VAT on internet use likely to be removed in next budget

The posts and telecommunications and information and communication technology (ICT) minister, Mustafa Jabbar, said he expects good news for the telecom industry in the next budget. The internet is the driving force nowadays, and it is a long-standing demand of ICT trade bodies to remove or erase the 15 per cent value-added tax on internet use. Their demand is expected to be met in the upcoming budget, the minister said. The cost of internet use will come down if the 15 per cent VAT is removed, he added. Telecom operators, however, said the government has to pay more attention to the ICT sector as it is a new sector. E-commerce-based entrepreneurs said they face a lot of problems to run their businesses, and require policy support. The Association of Mobile Telecom Operators of Bangladesh (AMTOB) recently placed a set of proposals on the budget before the National Board of Revenue (NBR). In the budget proposal, the association said the mobile phone operators invested a lot of money, even though all except Grameenphone could not make profits. The operators have to pay a lot for different kinds of taxes. They are investing a lot of money to build a network but could not make profits because the desired customer base has not been created, the association said. The association wanted the corporate tax on earnings of publicly listed and non-listed companies be brought down from 40 and 45 percent respectively to 25 and 35 percent. At present, mobile phone operators are supposed to pay Tk. 100 while issuing a new SIM. If the SIM is lost or damaged, the consumer has pay a tax of Tk. 100 for replacement. They demanded that the tax be scrapped in the next budget. The associations proposal said the applicable 21.75 per cent tax on mobile internet use should be withdrawn so that mobile internet prices can be slashed, making its prices consistent with broadband price. The representatives of the telecom sector objected to the payment of supplementary duties and surcharges on mobile talktime. This kind of surge charges is not logical, they argued. Finance minister AMA Muhith has already hinted at a cut in corporate tax in the upcoming budget, admitting that the rates are much higher in Bangladesh. Bangladesh Association of Software and Information Services (BASIS) president Syed Almus Kabir said the software companies have to pay 10 per cent tax while exporting software even though the government has declared a tax holiday for the ICT sector. This is caused by an ambiguity in respect of tax holiday, he pointed out. He demanded a clear set of guidelines for a tax holiday. Software companies, software developers and companies, and all information technology-related companies use the internet as raw materials but we have to pay 15 per cent VAT. He added that prices of different kinds of products used in the sector have gone up. Amtob secretary TIM Nurul Kabir demanded the publication of a set of guidelines for the e-commerce sector to ensure that the promising sector flourishes.