Dhaka, Bangladesh
Hiked call cost cuts both ways

Hiked call cost cuts both ways

Increased SD may reduce mobile-internet uses, govt revenues

News Special: Stakeholders from within and without are critical that the government is increasingly "taxing" telecommunications sector regardless of whether it hurts both customers and the industry. The tax hike in the proposed new budget is 'contradictory' to the government's digital-Bangladesh vision, said telecom operators and analysts. Mentioning that around 65 per cent of Bangladesh's mobile-phone subscribers are feature-phone users and that they are using phone for making calls and sending messages, the critics think such fiscal measure could cut both ways: government earnings would decline, let alone increase, after the hike in SD or supplementary duty as the feature- phone users could reduce using costlier service. Telecom Minister Mustafa Jabbar expressed frustration over the budgetary measure and assured that the Prime Minister's ICT Affairs Adviser, Sajeeb Wazed, was informed about the matter. Currently, the telecom industry accounts for about 7 per cent of Bangladesh's economy. The minister said if the telecom companies get a more favourable business environment, then it will help the industry contribute up to 10 per cent of the economy within a very short time. "But this is not the case. Instead, the sector has found a new challenge in running regular operations." In terms of the customer-to-revenue ratio, Bangladesh's telecom sector is in the lowest position. In terms of taxes, however, Bangladesh's mobile- network providers pay the highest tax among their counterparts in other South Asian countries. "This imbalance cannot continue for much longer," the minister added. State Minister for ICT Zunaid Ahmed Palak has said that the use of the internet increased 50% during the coronavirus pandemic. Besides, online marketing has increased by 50% while the number of opening of mobile accounts went up to 50 lakh, said Palak. He also pleads to finance ministry for cutting back on the internet-usage tax. The Association of Mobile Telecom Operators of Bangladesh on Tuesday demanded withdrawal of the newly imposed 5.0 percent supplementary duty on mobile-phone use in the proposed budget for the fiscal year 2020-2021. National Board of Revenue (NBR) Chairman Abu Hena Rahmatul Muneem thinks the increase in supplementary duty from 10 percent to 15 percent on the services provided through mobile-phone SIM/RIM card in the budget proposal of FY 2020-21 will not increase call rate much. "The cost will increase only by 5 paisa against each taka usage," he said. "I think an increase of 5 percentage points in supplementary duty won't make much of a difference," he further said. The AMTOB said the increase in supplementary duty in the new proposed budget will be an additional burden to customers. Therefore, they urged the authorities to reconsider the matter. Hossain Satad, director and head of Public and Regulatory Affairs of GP, said the decision to increase supplementary duty will be a burden for the customers and unfavourable to unlocking possibilities of Digital Bangladesh. "We urge the government to reconsider this decision before implementing in the attribution of our valued customer interest," he added. Meanwhile, another mobile operator, Robi, says it is "very unfortunate" that the 2% minimum tax on its revenue imposed in last year's budget remained unchanged. Shahed Alam, chief corporate and regulatory officer of Robi Axiata Limited, said there is still a chance to review the "self-defeating" tax and hoped the government would take positive decision in this regard. "Apart from these, increasing supplementary duty by 5% on all telecom-related services is highly regrettable," he said, adding that the decision would bring further misery to the customers. In an immediate budget reaction, Banglalink Chief Executive Officer (CEO) Erik Aas also came up with similar remarks. He said an additional 5% supplementary duty on telecom services will especially affect the less- privileged consumers. Erik Aas urged the government to withdraw the VAT on internet in view of the impact of coronavirus-induced economic crises on internet users. He also requested the government to reconsider the minimum tax imposed on mobile operators. Critics were of the view that the finance authorities found it an "easy way of budget-deficit financing". They think slashing costs of both mobile-and internet usages could enhance use massively and thus help unlock opportunities both at home and abroad. At post-budget talks on a reappraisal of the proposed Tk 5.68-trillion budget, huge revenue deficit and so Planning Minister MA Mannan didn't straightway disagree with analysts on the merits of cheap mobile-internet usage and the demerits of making it costlier. He invoked a semele. "Finance's work is like miners'--the miners start drilling wherever they smell oil or gas deposits and the finance looks for sources where-from bulk revenue can be obtained."

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