The Association of Mobile Telecom Operators of Bangladesh (AMTOB) is urging the government to reconsider the recent tax increase on mobile services and SIM connections, warning that this move will hurt consumers and hinder progress towards a "Smart Bangladesh" by stifling investment in the telecom sector.
The association called for a review of the imposed taxes, saying that the imposition of an additional 5 per cent supplementary duty on mobile service usage and a Tk 100 increase in the Value Added Tax (VAT) on SIM connections is likely to negatively impact the telecommunications industry as the government has imposed taxes without thinking of long-term effects.
Representatives of the mobile operators Grameenphone, Robi and Banglalink raised their concerns on Wednesday at a post-budget press meeting at the AMTOB secretariat in Banani, Dhaka.
AMTOB representatives, during the budget reaction, said, "Whatever tax you impose on me, it will actually be passed on to the customer. Not only has the tax increased, but it will hike our cost by 12 to 15 per cent. This will ultimately have to be borne by the consumer and will have an impact on consumption. If there is an impact, the affordability of people's digital services will decrease and impact the digital economy.
Shahed Alam, chief corporate and regulatory affairs officer of Robi Axiata, said in response to questions from journalists that Tk 58 of a Tk 100 recharge goes to the government treasury while providing the service. In a customer context, they are now getting Tk 72 service instead of Tk 75 for Tk 100 recharge. However, in the case of data, only Tk 39 has to be paid to the government treasury.
He said that in the progress of Smart Bangladesh, 40 to 45 per cent of the country's population is still out of telecom service. Compared to our neighbouring countries, we are several times behind in data usage at the customer level. However, there is massive scope for revenue growth in this sector along with customer growth."
Taimur Rahman, chief corporate and regulatory affairs officer at Banglalink, stated, "The imposition of additional supplementary duties and SIM taxes will adversely impact the telecom industry and our customers. As the industry faces a period of de-growth, these new taxes add a financial burden that could hinder overall GDP growth and increase costs for customers who rely on affordable telecom services for their daily needs."
Hans Martin Henrichsen, chief corporate affairs officer of Grameenphone, said, "The government is actually far away from increasing the penetration. We think the government should try to make mobile communication and Internet accessibility cheaper. They should not increase the prices."
AMTOB stressed that these measures will hinder the country's overall digitisation, adversely affecting GDP growth and contradicting the Smart Bangladesh vision of the government. Hence, they called for a review of the imposed taxes.
