The government will cut the value-added tax on internet use to 10 per cent from the existing 15 per cent from July 1.
Finance minister AMA Muhith at a meeting with telecommunications and ICT minister Mustafa Jabbar and ICT industry leaders at the finance minister’s Economic Relations Division office assured them of the VAT rate cut.
ICT sector leaders have been demanding withdrawal of VAT on internet use for last few years.
They intensified their efforts to press for their demand in last few days as the government in the proposed national budget for the fiscal year of 2018-19 has not changed the VAT rate of 15 per cent on internet use.
Currently, subscribers pay 15 per cent VAT on use of internet from internet service providers while mobile internet users pay 15 per cent VAT, 5 per cent supplementary duty and 1 per cent surcharge.
Once the VAT rate is cut, users of ISPs’ internet will pay 10 per cent VAT, while mobile internet users will pay 10 per cent VAT, 5 per cent supplementary duty and 1 per cent surcharge as the government will not cut SD and surcharge.
After the meeting with Muhith, Mustafa Jabbar told reporters that they had solved all the problems and fulfilled all the demands made by the industry.
‘The finance minister will declare the change of the VAT rate in parliament. We are happy with our achievements,’ Jabbar said.
Muhith is expected to announce the rate cut in his concluding budget speech next week, before the passage of the national budget for FY19.
Earlier, on Wednesday, all the seven trade bodies related to ICT and telecommunications sectors reiterated their demand for withdrawal of VAT on internet use in the budget for FY19.
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