Using mobile phones to get costlier as budget proposes to raise duty on SIMs

The use of mobile phones will get costlier, as the budget for the coming 2016-17 FY proposes to raise the duty on SIM cards.

Finance Minister AMA Muhith said in his budget speech that he wished to increase the supplementary duty to 5 percent.
 
Muhith, on Thursday, presented his budget proposal of Tk 3.41 trillion with a deficit of Tk 978.53 billion.
 
He told the House that taxes on SIM cards had been ‘significantly’ reduced in the current budget, resulting in a revenue drop from the telecom sector.
 
“In order to enhance revenue collection from this sector, I am proposing to increase the rate of supplementary duty on SIM card related services from 3 percent to 5 percent.”

The highest current rate was Tk 2 per minute but a caller pays Tk 2.39 after 15 percent VAT, 1 percent surcharge on top of 3 percent supplementary duty.
 
The price will stand at Tk 2.44 if supplementary duty is raised to 5 percent. 

The proposed duty will impede the sector’s growth if implemented, said TIM Nurul Kabir, secretary general of the Association of Mobile Telecom Operator of Bangladesh, AMTOB.
 
Raising the supplementary duty on SIM usage will add to the financial burden of mobile users, said an official of Grameenphone, which has the largest number of subscribers.
 
“From now on, for BDT 100 talk time, a customer has to spend BDT 121.75. The mobile phone industry in Bangladesh is highly taxed; taxing it further will disrupt its role in building Digital Bangladesh,” said Mahmud Hossain, Grameenphone’s chief corporate affairs officer.

Robi’s vice president for communications and corporate responsibility, Ikram Kabir, urged the government to refrain from increasing the duty, saying it would make calls costlier and reduce revenue earnings from data usage and voice calls.      

In a press statement, he said, Bangladesh continues to have the lowest ARPU (average revenue per user) in the world but the sector was paying higher corporate tax than others. 

“We urge the government to reduce the corporate tax on the mobile industry, as that will encourage more investment in this sector.”