Seven information communication technology and telecommunications-related associations on Wednesday demanded that the government withdraw all types of taxes on internet use it proposed in the budget for the next fiscal year (2018-2019).
The associations announced a set of the demands at a joint press conference on the proposed national budget held at the Pan Pacific Sonargaon Hotel in Dhaka for the government’s consideration before approving the proposed budget.
The associations include Association of Mobile Telecom Operators of Bangladesh, Bangladesh Association of Software and Information Services, Bangladesh Mobile Phone Importers Association, Internet Service Provider Association of Bangladesh, Bangladesh Computer Samity, E-Commerce Association of Bangladesh and Bangladesh Association of Call Centre and Outsourcing.
Leaders of the associations termed the proposed budget unfriendly to the digital businesses.
They also demanded revisit the tax structure for digital services and extension of tax holidays for ITES-related businesses for next 10 years.
The associations also sought withdrawal of 15 per cent value-added tax on mobile phone assembling sector to facilitate assemblers gradually to turn into manufacturers.
Currently, a total of 21.75 per cent taxes including VAT, supplementary duty and surcharge are applicable on internet services.
Tax on internet is against the government’s vision of Digital Bangladesh. On the other hand, Bangladesh lags behind in internet connectivity, which is now considered as basic rights in the modern world, they said.
AMTOB secretary general TIM Nurul Kabir said that withdrawal of VAT and other taxes on internet use would help establish a digital culture in the country.
The existing tax burden on internet users is huge, he said.
Currently, the government is earning about Tk 1,100 crore in VAT and other taxes on internet.
The earnings will jump to Tk 5,000 crore per year due to rise in uses of digital services if the government withdraws the taxes, he said.
BASIS president Syed Almas Kabir said that the government should let the digital businesses flourish first before taxing it.
Digital businesses like ridesharing should be tax free, he said, adding that creating digital society would help the country generate more jobs.
Imposition of VAT on mobile phone assembling business will make the imported mobile handsets cheaper than the assembled ones in the country, said BMPIA president Md Ruhul Alam Al Mahbub Manik.
Several projects with investment of few hundred crores of taka have become halted due to imposition of the VAT, he said.
Total tax burden will increase to 34.2 per cent on the local mobile assembling industry if 15 per cent VAT is added to the existing tax structure while importers will have to pay only 31.1 per cent tax and duty.
ISPAB president MA Hakim, BCS director AU Khan Jewel, E-CAB joint secretary Nasima Akter Nisha and BACCO joint secretary general Mohammad Aminul Hoque attended the press conference, among others.