Finance minister AMA Muhith on Wednesday warned that action would be taken against internet service providers reluctant to reduce value-added tax for end users in line with fiscal measures.
He gave the warning while answering a question that the end users were yet to enjoy the tax benefit awarded by the government in the recently approved finance bill 2018 by slashing the VAT to five per cent from 15 per cent on internet bills.
A visibly vexed Muhith said the errant internet service providers would face action.
Authorities concerned would take steps in this regard, he added.
Meanwhile, Bangladesh Telecommunication Regulatory Commission on Wednesday served letters on the mobile phone operators asking them to describe how the entities have adjusted the internet packages as the reduced VAT rate on internet usage came into effect from July 1, a senior BTRC official told New Age.
He said that the commission would assess the reports of the mobile phone operators and they would take next move based on the assessment.
Neither the mobile phone operators nor the internet service providers implemented the reduced VAT rate on internet bills on different grounds.
ISPs have mentioned that the new VAT rules on internet bills would affect their business as they would not get any rebate under the new structure.
Before the VAT cut, ISPs used to collect 15 per cent VAT from customers and simultaneously got about 10 per cent rebate. But, under the new structure internet service providers would not get the facility.
Mobile operators blamed lack of clarity in the government’s order behind the non-implementation of the new VAT rate on internet usage.
The Association of Mobile Telecom operators of Bangladesh recently sent a letter to the National Board of Revenue seeking clarification of the order.
According to the telecom regulatory commission, the number of internet users reached 8.67 crore till May this year.
Of them, 8.11 crore users access the internet through mobile phone operators — Grameenphone, Banglalink, Robi and state-owned Teletalk — and the rest 56.82 lakh access internet with broadband connections.
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