Govt likely to scrap plans to hike duty on mobile phone services

In the proposed budget for FY21, Finance Minister Finance Minister AHM Mustafa Kamal proposed increasing the supplementary duty on all kinds of telecom services to 15% from the previous 10%

In face of wide range criticisms from users and operators, government is going to scrap proposed supplementary duty (SD) on mobile phone services in the proposed national budget for fiscal year 2020-21.

In the proposed budget for FY21, Finance Minister Finance Minister AHM Mustafa Kamal proposed increasing the SD on all kinds of telecom services to 15% from the previous 10%.

"Considering the present pandemic situation, when people are working from home and joining conferences and seminars through virtual platform, mobile phone users and operators urged the government to withdraw the proposed SD, a Finance Ministry official told Dhaka Tribune who preferred not to be named. .

On top of that, economist, rights group as well as the ICT sector business people also criticized the government move terming it as anti digital Bangladesh vision, said the official.   

 Following the strong demands, the government is going to cut the proposal from the budget to ensure low cost telco services amid pandemic, he added.  

In addition, on June 24, Telecom Minister Mustafa Jabbar, in a demand letter to the finance minister, called for withdrawal of the additional SD, pointing out that it would thwart the process of digitalization.

Several other cabinet members and members of the parliament also requested the finance minister to scrap the SD.

In the proposed budget, the government proposed a 5% hike in the SD on mobile phone services - voice and data.

The supplementary duty was proposed at 15% from the existing 10% on services provided through mobile phone SIM/RIM cards, according to the budget speech by Finance Minister AHM Mustafa Kamal at the parliament on June 11.

Currently, in addition to the SD, mobile users pay a 15% value-added tax and 1% surcharge on talk-time and messaging services, while the VAT on mobile internet use is 5%.

The government first imposed a 3% SD on voice, internet, SMS, and other mobile phone services in FY2016, which was increased to 5% in FY2017 and 10% in FY2020.

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