The Covid-19 pandemic has categorically exposed the need for internet or digital networks in the life of people, be they job holders or students.
This has lead to calls for suspending taxes on internet services and educational gadgets to make them more accessible to low- and middle-income people.
Homes have turned into the workplace for office staff and the school for students when the government imposed a lockdown and continued to linger aiming at curbing the spread of deadly disease. The process of lockdown extension is still going on as no one can predict when the pandemic will go or whether it will go at all.
Digital devices like laptops, mobile phones or tablets with an internet connection have become an integral part of everyday life for students as well as service holders.
Physical schooling still remains closed but education continues through digital platforms, zooms or other platforms.
Corporate companies are allowing home offices to avert infection.
As a result, internet use has increased sharply and so have individual expenses. The rise in internet cost has left middle- and low-income people in trouble to bear the extra cost of education.
In the given context, rights groups, economists and common people have called for reducing the supplementary duty and taxes on the use of mobile internet to make it affordable for the people especially students.
According to the directives of the current budget for FY2020-21, an individual has to pay a total of 33.25 per cent taxes including a 1 per cent surcharge.
Currently, a mobile phone user has to pay 15 per cent Value Added Tax (VAT), 15 per cent supplementary duty and 1 per cent surcharge for a phone call or internet use based on incremental calculation.
This means, a user has to recharge Tk 133.25 to enjoy a service of Tk 100, otherwise s/he will get service of Tk 75.05 against Tk 100 recharge.
“It is very painful for me to spend more for education at a time when pandemic has squeezed my income,” Md Shafiul Alam, a private service holder, told The Business Post.
To join online classes, he has to spend at least Tk 1,000 per month for two of his children.
In addition, there was a fixed cost to buy digital devices, said Alam.
The government should cut tax and offer incentives for education in the next budget and it should continue until the reopening of schools, he added.
“As the educational institutions remain closed due to the Covid-19 pandemic, children of low-income people are facing difficulties to attend classes because of the high cost of internet and digital devices,” Rasheda K Choudhury, executive director of Campaign for Popular Education (CAMPE) told The Business Post.
Television, internet, mobile and radio-based learning programmes were introduced but yet to reach a substantial number of learners – widening the digital division and disparity, said Rasheda, also an advisor to former caretaker government.
“To make the internet and digital devices affordable, the government should not impose any kind of taxes on internet and gadgets in the budget for FY22,” she said.
It is very important to ensure a digital device for students from primary to higher secondary levels, says Rasheda.
She also called for allocating 20 per cent of the total budget for education.
Taimur Rahman, chief corporate and regulatory affairs officer of Banglalink said, “We have been expressing our reasonable demand for a revised taxation regime for a long time. It would be great to see them reflected in the upcoming national budget.”
If the existing 15 per cent supplementary duty on mobile services and the VAT of Tk 200 per SIM are reduced, more people from the low-income group will feel encouraged to adopt digital facilities, he believes.
It also was equally important to slash the taxes on smartphones for the same reason, said Taimur.
“On the other hand, the minimum turnover tax rate for mobile operators currently stands at 2 per cent, which puts a heavy financial burden on small operators. The GSMA (an industry organisation representing the interests of mobile network operators worldwide) also echoed our views and concerns, and proposed slashing the tax rate down to 0.5 per cent,” he added.
It would be easier for them to operate and offer affordable digital services to their customers if these taxation issues were addressed by the authorities, said Taimur.
Meanwhile, economists also called for a temporary suspension of taxes on the internet and digital devices.
“For revenue generation, the telecommunication sector is significant for the government. However, considering the present situation, the government should temporarily suspend tax, VAT and surcharge on this sector for at least one year to ensure education for all,” Zahid Hussain, former lead economist of the World Bank, Dhaka told The Business Post.
A temporary suspension would give relief from the legal issue and the government could reinstate them when the situation improved, he explained.
“It is a part of the government’s vision of Digital Bangladesh,” the economist added.
“For education and business purposes, the necessity and usage of mobile internet-based services have increased substantially in the backdrop of the pandemic,” said Towfiqul Islam Khan, a senior research fellow at the Centre for Policy Dialogue (CPD) said recently.
In view of this, the government should withdraw the existing 15 per cent supplementary duty, and the 1 per cent surcharge levied on mobile internet while keeping the prevailing rate of VAT at 5 per cent unchanged, he added.
The government should withdraw the surcharge and supplementary duty to make the internet affordable as it has become an integral part of everyday life as people have to join the office from home and do many other emergency tasks online, said Towfiqul.
According to Bangladesh Telecommunication Regulatory Commission (BTRC), mobile internet users stood at 11.61 crore as of March 2021 while mobile phone users stood at 17.46 crore during the same period.
