Rise in duty on smartphone, services, minimum tax on turnover ‘frustrate’ Banglalink

Banglalink has said the government’s plans to increase duty on smartphone import and mobile telephony services along with minimum tax on turnover of the companies in the sector have left it “frustrated”.

Chief Corporate and Regulatory Affairs Officer Taimur Rahman says the plans announced in the national budget for 2019-20 in parliament on Thursday will “hinder the expansion of digital services in Bangladesh greatly”.

Finance Minister AHM Mustafa Kamal has proposed raising the customs duty on smartphones to 25 percent from the existing 10 percent.

Supplementary duty on services provided through SIM or RIM cards will be double, 10 percent, once his proposals are passed. Tax on SIM sale has also been proposed to increase to Tk 200 from Tk 100.     

Kamal proposed to raise the minimum tax for mobile companies to 2 percent on their turnover from 0.75 percent earlier.

“We feel hopeless as the issues of the telecom sector we have been presenting for long to save the subscribers’ interests have not been reflected in the proposed national budget,” Taimur said in a statement.

The move comes at a time when “we are relentlessly trying to provide the customers with services at reasonable prices”, he said.

The government considers smartphone users to be affluent, but “in reality, the use of smartphone by general people is gradually rising after the launch of 4G services because people from all classes are using smartphones to avail the digital facilities”, according to the statement.

The proposed hike in minimum tax on turnover will “overburden the telecom firms that are operating at losses and discourage shareholders to invest in these companies”, it said.

“We sincerely request the government of Bangladesh to reconsider these issues in order to ensure technological advancement and truly execute the dream of building a ‘Digital Bangladesh’,” it added.